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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549





FORM 10-KSB







|x | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|- | -------------------------------------------------------------------------------

For the fiscal year ended February 29, 2008



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|- | -----------------------------------------------------------------------------------------

For the transition period from ,
20, to , 20.

Commission File Number

33-98682





American Commerce Solutions, Inc.

(Exact Name of Registrant as Specified in
Charter)







|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Delaware                                                       |  | 05-0460102                             
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification Number)

1400 Chamber Drive, Bartow, Florida 33830

(Address of Principal Executive Offices)

(863) 533-0326

(Registrants Telephone Number, Including Area Code)





Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past 12
months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  YES     ̈  NO

Check if no
disclosure of delinquent filers in response to Item 405 of Regulation S-B is contained in this form, and no disclosure will be contained, to the best of registrants knowledge, in definitive proxy of information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB  x

Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)     ̈  YES    x  NO

State issuers revenues for its most recent fiscal year $2,850,768

Aggregate market value of the voting and non-voting common equity of the registrant held by non-affiliates of the registrant at February 29, 2008 was $1,755,252 based upon the closing sale price of $0.007 or the Registrants
common stock, $.002 par value, as reported by the National Association of Securities Dealers OTC Bulletin Board on February 29, 2008.

There were 250,750,293 shares of the Registrants $.002 par value common stock outstanding as of February 29, 2008

Transitional Small Business Format (check one)    Yes   ̈    NO  x









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AMERICAN COMMERCE SOLUTIONS, INC.

FORM 10-KSB - INDEX



|         |  |                                                                                                                  |  |   
|-------- |  | ---------------------------------------------------------------------------------------------------------------- |  | --
|         |  |                                                                                                                 
|Part I   |  |                                                                                                                  |  |   
|         |  |                                                                                                                 
|Item 1.  |  | Description of Business                                                                                          |  | 1 
|         |  |                                                                                                                 
|Item 2.  |  | Description of Property                                                                                          |  | 6 
|         |  |                                                                                                                 
|Item 3.  |  | Legal Proceedings                                                                                                |  | 6 
|         |  |                                                                                                                 
|Item 4.  |  | Submission of Matters to a Vote of Security Holders                                                              |  | 6 
|         |  |                                                                                                                 
|Part II  |  |                                                                                                                  |  |   
|         |  |                                                                                                                 
|Item 5.  |  | Market for Common Equity and Related Stockholder Matters                                                         |  | 6 
|         |  |                                                                                                                 
|Item 6.  |  | Managements Discussion and Analysis                                                                             |  | 7 
|         |  |                                                                                                                 
|Item 7.  |  | Consolidated Financial Statements                                                                                |  | 11
|         |  |                                                                                                                 
|Item 8.  |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                             |  | 27
|         |  |                                                                                                                 
|Item 8A. |  | Controls and Procedures                                                                                          |  | 27
|         |  |                                                                                                                 
|Item 8B  |  | Other Information                                                                                                |  | 27
|         |  |                                                                                                                 
|Part III |  |                                                                                                                  |  |   
|         |  |                                                                                                                 
|Item 9.  |  | Directors, Executive Officers, Promoters, and Control Persons; Compliance with Section 16(a) of the Exchange Act |  | 27
|         |  |                                                                                                                 
|Item 10. |  | Executive Compensation                                                                                           |  | 28
|         |  |                                                                                                                 
|Item 11. |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                   |  | 30
|         |  |                                                                                                                 
|Item 12. |  | Certain Relationships and Related Transactions                                                                   |  | 32
|         |  |                                                                                                                 
|Item 13. |  | Exhibits and Reports on Form 8-K                                                                                 |  | 32
|         |  |                                                                                                                 
|Item 14. |  | Principal Accountants Fees and Services                                                                          |  | 35
|         |  |                                                                                                                 
|         |  | Signatures                                                                                                       |  |   
|         |  |                                                                                                                 
|         |  | Certifications                                                                                                   |  |   



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##### Table of Contents

AMERICAN COMMERCE SOLUTIONS, INC.

This Annual Report on Form 10-KSB and the documents incorporated herein by reference contain forward-looking statements that have been made pursuant to the provisions of the Private Securities Litigation Reform Act of
1995. Such forward-looking statements are based on current expectations, estimates and projections about American Commerce Solution, Inc.s industry, management beliefs, and assumptions made by management. Words such as anticipates,
expects, intends, plans, believes, seeks, estimates, variations of such words and similar expressions are intended to identify such forward-looking statements. These statements
are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict; therefore, actual results and outcomes may differ materially from what is expressed or forecasted in any such
forward-looking statements.

PART I



|ITEM 1. | DESCRIPTION OF BUSINESS
|------- | -----------------------

American Commerce Solutions, Inc. was
incorporated in Rhode Island in May 1991 under the name Jaque Dubois, Inc. and was re-incorporated in Delaware in 1994. In July 1995, the Companys name was changed to JD American Workwear, Inc. In December 2000 the shareholders voted to change
the name of the company to American Commerce Solutions, Inc. to more accurately portray the activities of the company.

American Commerce Solutions, Inc.
(the Company or American Commerce) is a multi-industry holding company for its operating subsidiaries. As of the close of its most recently completed fiscal year end, the Company had two wholly owned subsidiaries operating in
the manufacturing segment and the fiberglass segment. The operating subsidiaries are International Machine and Welding, Inc. located in Bartow, Florida and Chariot Manufacturing Company located in Tampa, Florida.

The Company intends to expand its holdings by acquiring additional subsidiaries to facilitate its business plan. The current business plan has been in development since
June 2000.

International Machine and Welding, Inc. provides specialized machining services for heavy industry. Target customers in the region include
mining, agriculture processing, maritime, power generation and industrial machinery companies. Additional operations include heavy equipment service to the construction, forestry, waste and scrap industries. The operation provides complete service
of the equipment, which includes rebuilding undercarriages, engines, transmissions, final drives and hydraulics. The effective service area for the operation located in the Southeastern region of the United States is a prime and lucrative market for
such services. Growth in this region of the United States (population, infrastructure, and building) has created long term needs for construction equipment. All of these machines require periodic maintenance, and at certain points major overhauls.
In addition to its 38,000 square foot facility, the operation also provides fully equipped field service vehicles so machines do not have to be removed from the work site.

International Machine and Welding, Inc. also sells OEM and after-market repair parts for heavy equipment. The operation has an extensive cross-reference listing and network of sources. One of the major competitive
advantages of the operation is its ability to determine exactly what the customer needs and fulfill the requirement. In many cases, the customer may not have service manuals or to be able to identify part numbers. If a customer has more than one
type of machine, which is quite common, they may have to contact a number of different suppliers to get parts for multiple machines. Our operation identifies the required parts and arranges the necessary repairs. As a result, the customer only has
to make one phone call for all of their needs. This also makes International Machine and Welding, Inc. an attractive alternative for sales to customers outside the United States. Orders can be accumulated throughout the month and be sent on
consolidated shipments. This has created a niche market for the direct parts sales division. The operation currently has two customer relationships in the Caribbean. Management believes that this market has not been fully targeted by its competitors
and offers potential as a source of increased business.

Chariot Manufacturing Company, which was acquired on October 11, 2003 from a related party,
manufactures motorcycle trailers with fiberglass bodies. These trailers are sold on the retail level. The company also provides non-warranty repairs, modification of existing Chariot Trailers.

The Board of Directors of American Commerce Solutions, Inc. has determined that it will seek to acquire additional fiberglass manufacturing operations, machining,
fabricating, erecting and construction operations that utilize heavy equipment. Additional segments being considered are manufacturing supply operations, consumer products and commercial construction support services.



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ACQUISITIONS AND DIVESTITURES

The Company sold back to its original founder, the assets and certain liabilities of its JD American Workwear, Inc. operation and all of the Rhode Island Truck and Equipment, Inc. operations on May 31, 2001 and October 31, 2001,
respectively. The terms and conditions of these transactions have been reported in their respective Form 10-QSB for the period ended May 31, 2001 and November 30, 2001 and are incorporated by reference herein.

On June 1, 2000, the Company completed the purchase of International Machine and Welding, Inc. by acquiring all of the outstanding capital stock of its holding
company, Patina Corporation for a total purchase price of $4,446,159. The acquisition was accounted for using the purchase method of accounting and, accordingly, International Machine and Welding, Inc.s results of operations have been included
in the consolidated financial statements since the date of acquisition. The acquisition was funded by the issuance of 9,800 shares of Series C 6% Preferred Stock.

On June 1, 2000, the Company completed the purchase of Rhode Island Truck and Equipment Corp. d/b/a International Paving, Inc. by acquiring all its outstanding capital stock for a total purchase price of $238,000. The acquisition was
funded by the issuance of 200,000 shares of common stock.

On June 1, 2001, the Company discontinued the operations of its JD American Workwear, Inc.
subsidiary and exchanged certain assets and liabilities with the President of the subsidiary for 725,000 shares of the Companys common stock and notes payable of $43,115. On October 31, 2001, the Company returned all of the stock of Rhode
Island Truck and Equipment Corp. to its original owners in exchange for 155,000 shares of the Companys common stock.

On October 11, 2003, the
Company acquired 100 percent of the outstanding common stock of Chariot Manufacturing Company, from a related party for $360,000. The acquisition was financed through the assignment of a note receivable valued at $150,000, $30,000 worth of common
stock and a note payable for $180,000.

During the year ended February 28, 2005, the Company entered into a purchase agreement to acquire certain
assets, including equipment and inventory from a supplier for $848,650. The Company acquired equipment and inventory valued at $768,826 and $6,208, respectively, and forgiveness of payables of $73,616 by the supplier. In exchange for the assets and
forgiveness of payables, the Company assigned receivables $131,658, forgave debt of $273,376 and issued notes payable of $443,616.

BUSINESS STRATEGY

The Company has adopted a business strategy that focuses on expansion through acquisition. The key elements of acquisition targets must include solid
management, profitability, geographical locations compatibility and/or undervalued companies that can be enhanced by shared services and opportunities.

Under the current strategy, the Company is developing three divisions of its chosen segment: Manufacturing and Fiberglass.

MANUFACTURING SEGMENT

The Manufacturing Segment through International Machine and Welding, Inc. offers a broad range of products and services to heavy industry through its three
divisions. The operations of Division 1 provide specialized machining of very large components and machinery repair to industries such as aerospace, agricultural processing, chemical, defense, mining, maritime and power generation. Our 38,000 square
foot facility located in Bartow, Florida is one of the only operations in the Southeast capable of machining components up to 55 feet in length and/or 20 feet in diameter. Division 2 provides heavy equipment service (parts and labor), which includes
repair and bonded rebuilds of engines, tracks, undercarriages, transmissions, final drives and hydraulic systems on heavy equipment. The equipment we repair is from the heavy construction industry including bulldozers, scrapers, loaders, excavators,
large tractors, rollers, etc. The division provides field service via equipped service trucks to provide repairs at the customers site. Division 3 sells replacement parts to the heavy equipment market, directly to the end user with most of the
parts exported outside the United States.

FIBERGLASS SEGMENT

The Fiberglass Segment through Chariot Manufacturing Company produces a line of fiberglass trailers suitable for a wide range of uses. Some of the uses include the transportation of motorcycles, ATVs, personal watercraft, small vehicles,
vending, mobile fiber optic workstations, utility and other specialized applications. The trailers are available in both open and enclosed configurations. The fiberglass unibody construction of the product is stronger, yet lighter than conventional
aluminum and steel trailers. The Chariot trailer has a steel tube sub frame, which is tucked up inside the fiberglass body reducing drag. Since the body



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is molded in fiberglass, the shape can be optimized to reduce drag. The overall shape, coupled with the light weight of the trailer also improves gas mileage
while towing. The trailers can be fitted with optional features such as custom interiors and sleeper options.

MANUFACTURING AND SOURCES OF SUPPLY

Manufacturing Segment

Supplies and parts used by
International Machine and Welding, Inc. are purchased from several major suppliers including Caterpillar, John Deere, Case and other major manufacturers and after market parts suppliers. The machining operations purchase from many suppliers based on
the need of specific jobs. Although the operations do not have any long-term contracts with any of its suppliers, management believes that it has excellent business relationships with its current suppliers and it is not exposed to any significant
risk in the event any one source of supply is discontinued, because there are many suppliers.

Fiberglass Segment

Likewise, Chariot Manufacturing Company has a ready supply of material available through both seasoned and new suppliers and vendors.

MARKETING AND SALES

Manufacturing Segment

International Machine and Welding, Inc. operates three divisions at one location. Division 1 sales have traditionally come from industries within a 100-mile radius of its
facilities requiring specialized machining applications. Direct salesmen have established relationships with specific customers and the Company has expanded the business relationship through quality, rapid turn and value. While this business is
quite lucrative, visibility is limited. The operation intends to expand its operations in the OEM market, where the subsidiary provides components to manufacturers of large machines. These types of accounts generally involve annual contracts with
three-month rolling schedules. The expansion of the market also is expected to increase the serviceable territory from the Southeast to include the entire United States.

Direct sales personnel who primarily target mid-tier accounts handle sales for Division 2 and 3. We believe that this broad niche market is largely untapped by the larger factory-sponsored operations which cater
specifically to very large accounts. Margins are typically very slim in these accounts and a large percentage of the customer base is represented by very few accounts. Because we are an independent repair facility, we can provide service to a much
broader base of customers with greater margins than the large factory-sponsored competitors.

Fiberglass Segment

Chariot Manufacturing Company sells directly to individuals. Inquiries from individuals come from a number of sources including the Companys participation in
industry events, the Companys web site and from people who have seen the product on the road and called the Companys phone number, (which is on every trailer produced either in graphic form or molded into the fiberglass body). Many
inquiries result from referrals from existing customers. The Company has a 30-year history and is well known in the industry.

COMPETITION

Manufacturing Segment

The principal competitors of the Manufacturing
Division consists of regional companies such as Southern Machinery, Florida Plating and Machine, Arroyo and Florida Metalizing in the machining operations and national corporations such as Ringhaver Equipment, Caterpillar, and Case repair facilities
in the heavy equipment parts and service category. Management believes that the ability to rapidly turn goods or to provide parts on a timely basis gives it a competitive advantage. We are able to ship parts directly to the consumer, usually on the
same day as the order or to return all service work within the time specified either by completing the work at the customers site or because of immediate turnaround capabilities.



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Fiberglass Segment

Chariot
Manufacturings principal competitors include companies such as Pace American, Hallmark, Feather Light and Wells Cargo. Chariot is competitively priced when compared to comparably equipped trailers. Chariot is positioned in the market as a
premium product. Many features are standard equipment on the Chariot, while they are options on competitive products. Chariots aerodynamic styling, lightweight, unibody construction, balance, resale value and standard features differentiate it
from the competition.

CUSTOMER DEPENDENCE

Manufacturing
Segment

International Machine and Welding, Inc. has a broad and diverse base of customers. The division does not rely on any single customer, the loss of
which would have a material adverse effect on the segment. This division does generate a significant amount of revenues from sales and services provided to three different industries. The construction industry accounted for approximately -32% of the
divisions revenues in fiscal 2008 compared to 38% in fiscal 2007, while the industrial and mining industries accounted for approximately 20% and 47% in fiscal 2008 compared to 31% and 28% in fiscal 2007, respectively, of the divisions
total revenues. Due to these concentrations, the results of operations of the division could be affected by changes in the economic, regulatory, or other related conditions impacting on these industries.

Although the division does not rely on a single customer, three of the Companys customers accounted for approximately 48% of total revenues for the year ended
February 29, 2008. These customers were the Mosaic Company 36%, Marden Industries Inc. 6% and Bul-Head Corp 6%.

Fiberglass Segment

Chariot Manufacturing Company has a wide base of customers. The loss of a single customer or dealer would not have a material adverse effect on the business. The primary
use of the product is to transport motorcycles. The motorcycle industry growth has been strong in recent years. Sales for the Companys products, however, are not tied to sales of new motorcycles.

EMPLOYEES

At February 29, 2008, the Company and its subsidiaries had
31 full-time employees and the parent operation has two full time executives. The Manufacturing segment employs 21 full time employees. Chariot Manufacturing Company employs 8 full time workers.

FUTURE ACQUISITIONS

The Company remains dedicated to its basic business
plan, which calls for growth through acquisition of strategic business opportunities. Although discussions and negotiations continue with multiple companies, the most anticipated opportunities remain to be within the fiberglass industry. As of the
filing of this document, we have not completed the close of a fiberglass recycling company, however progress is being made daily with all requisite functions, i.e., accounting, legal and structural.

FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-KSB (including the
Exhibits hereto) may contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding, among other things,
the financial condition and prospects of the Company and its subsidiaries, results of operations, projections, plans for future business development activities and the opportunities available within its market areas, capital spending plans,
financing sources, projections of financial results or economic performance, capital structure, the effects of competition, statements of plans, expectations, or objectives of the Company, and the business of the Company and its subsidiaries. These
forward-looking statements are typically identified by words or phrases such as believe, expect, anticipate, plan, estimate, intend, and other similar words and expressions, or
future or conditional verbs such as should, would, and could and other characterizations of future events or circumstances. In addition, the Company may from time to time make such written or oral
forward-looking statements in future filings with the Securities and Exchange Commission (including exhibits thereto), in its reports to stockholders, and in other communications made by or with the approval of the Company.

These forward-looking statements reflect the current views of the Company at the time they are made and are based on information currently available to the management
of the Company and upon current expectations, estimates, and projections regarding the Company and its industry, managements beliefs with respect thereto, and certain assumptions made by



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management. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors (many of
which are outside the control of the Company), which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Such forward-looking statements speak only to the date that such statements are
made, and the Company undertakes no obligation to update any forward-looking statements, whether as the result of new information, future events, the occurrence of unanticipated events, or otherwise. The following sets forth some, but not
necessarily all, of the factors that may cause the Companys actual results to vary materially from those which are the subject of any forward-looking statements.

RISK FACTORS

Accumulated Deficit and Operating Losses and Anticipated Earnings; Explanatory Language in Auditors
Report. The Company had an accumulated deficit at February 29, 2008 of $18,250,936 and net loss to common shareholders of $1,036,246 for the year ended February 29, 2008. The Company had an accumulated deficit of $17,214,690, and net loss
to common shareholders of $1,450,388 for the year ended February 28, 2007. Additionally, the Company is in default on several notes payable. The auditors opinion on the financial statements expresses substantial doubt about the ability to
continue as a going concern. The financial statements are presented on the basis that the Company is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the ordinary course of business. While there
can be no assurance of this outcome, management believes its plan of operation will allow the Company to achieve this goal.

Growth Plans and Risk of
Expansion. The Company adopted and implemented a business strategy, which seeks growth and expansion through the acquisition of synergistic companies. Accordingly, the growth and financial performance of the Company will depend, in large part, upon
the Companys ability to identify and locate suitable acquisitions, to manage such growth and the resultant diverse operations, to manage the margins of the acquired operations, and to attract, hire, train, and retain qualified supervisory
personnel and other operational employees to meet the Companys needs as it expands, as well as the availability of sufficient working capital. Difficulties resulting from the failure of the Company to manage and control its growth could
materially adversely affect the Companys operating results and financial condition.

No Assurance of Acquisitions. Although the Company has had
preliminary discussions with potential acquisition candidates, the Company has not completed any acquisitions in the fiscal year ended February 29, 2008. The Company does have current understandings or arrangements (oral or written) relating to
specific acquisitions, but cannot give specific timing to close the potential acquisitions. Until binding agreements are in place there can be no assurance that any proposed acquisition will be consummated or that adequate, acceptable and affordable
financing will be available.

Furthermore, to the extent that acquisitions are consummated, the Companys success or failure will depend upon
managements ability to integrate the acquired business into the company and implementation of adequate management skills and systems necessary to accomplish the Companys strategy. Additionally, the Company is unable to predict whether or
when, once integrated, any acquisition may achieve comparable levels of revenues, profitability, or productivity as existing Company operations, or otherwise perform as expected (including achievement of expected synergies or financial benefits).
The Company may face competition for desirable acquisitions from entities that may possess greater resources than the Company.

Acquisition Risks.
Acquisitions involve a number of special risks, some or all of which could have a material adverse effect on the Companys results of operations or financial condition. Such risks include, but are not limited to, the diversion of
managements attention from core operations, difficulties in the integration of acquired operations and retention of personnel, customers, and suppliers, unanticipated problems or legal liabilities, tax and accounting issues, and the inability
to obtain all necessary governmental and other approvals and consents.

Need for Additional Financing. Proceeds from notes payable and long-term debt
provided the working capital needs and principal payments on long-term debt through most of fiscal 2008. However, the Company will need to obtain additional financing in order to finance its acquisition and growth strategy. There can be no assurance
that debt or equity financing will be available to the Company on acceptable terms, if at all. If the Company does require additional financing and it cannot be obtained or the terms of such financings are unfavorable, it may have a material adverse
impact on our operations and profitability, and the Company may need to curtail its business plan and strategy.

Loss of Certain Members of Our Management
Team Could Adversely Affect the Company. The Company is dependent to a significant extent on the continued efforts, abilities and funding of our Chairman, Robert E. Maxwell and President and Chief Executive Officer, Daniel L. Hefner. If the company
was to lose the services of either of these individuals or other key employees or consultants before a qualified replacement could be obtained, the business could be materially affected.

Expected Volatility in Share Price. The market price of our stock has traded in a wide range. From March 1, 2001 through February 29, 2008 the price of our common shares has ranged from $0.005 to $0.78 per
share. The price of our common stock may be subject to fluctuations in response to quarter-to-quarter variations in operating results, creation or elimination of funding opportunities, restriction of the acquisition plans, and favorable or
unfavorable coverage of our officers and Company by the press.



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|ITEM 2. | DESCRIPTION OF PROPERTY
|------- | -----------------------

International Machine and Welding, Inc. owns in
fee simple title a 38,000 square foot facility in Bartow, Florida, which currently serves as the principal executive offices of American Commerce Solutions. A note payable to Valrico State Bank, originally at $875,000 encumbers this building. As of
February 29, 2008, the balance on this note is $721,926. This note was refinanced in December 2005 for three years. The original note and mortgage in favor of Valrico State Bank allowed the Company to negotiate a settlement with GE Capital
Small Business and other creditors, substantially reducing debt service and generating a one time gain of $812,014, which was recognized during fiscal year ended February 28, 2003.

Chariot Manufacturing Co. has its corporate offices at the International Machine and Welding facilities in Bartow, Florida. Its manufacturing operations are housed in an approximately 12,500 square foot moveable
facility located in Tampa, Florida. The land that the facility is housed on, approximately 1.5 acres, is under a lease /option by AFG assigned to American Commerce Solutions, Inc. as part of the July 2004 asset purchase of AFG assets. AFG is one of
Chariots key fiberglass suppliers. It is anticipated that the facilities will be adequate to meet the companys sales projections until a more permanent facility can be secured or the land is purchased to create a more permanent
operation. The adjacent, slightly larger parcel is available. ACS has a right of first refusal on this parcel.



|ITEM 3. | LEGAL PROCEEDINGS
|------- | -----------------

None.



|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|------- | ---------------------------------------------------

During the year ended
February 29, 2008, the Company did not submit any matters to a vote of its security holders.

PART II



|ITEM 5. | MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
|------- | --------------------------------------------------------

MARKET
INFORMATION

Since the April 1996 closing of the Companys initial public offering, the Companys Common Stock has traded in the over-the-counter
market on the National Association of Securities Dealers, Inc. OTC Bulletin Board System (OTCBB). Until January 31, 2001 the companys common stock traded under the symbol JDAW. In connection with the name change,
since February 10, 2001, the common stock has traded under the symbol AACS. The following table sets forth the range of high and low closing bid quotations of the Common Stock as reported by the OTCBB for each fiscal quarter for the
past two fiscal years. High and low bid quotations reflect inter-dealer prices without adjustment for retail mark-ups, markdowns or commissions and may not necessarily represent actual transactions.



|                                                            |  |            |       |     |   |       
|----------------------------------------------------------- |  | ---------- | ----- | --- | - | ------
|                                                            |  | Bid Prices
|                                                            |  | High       |       | Low
|FISCAL 2008                                                 |  |            |       |     |   |       
|                                                            |  |           
|First Quarter (March 1, 2007 through May 31, 2007)          |  | $          | 0.013 |     | $ | 0.008 
|Second Quarter (June 1, 2007 through August 31, 2007)       |  | $          | 0.012 |     | $ | 0.0085
|Third Quarter (September 1, 2007 through November 30, 2007) |  | $          | 0.012 |     | $ | 0.004 
|Fourth Quarter (December 1, 2007 through February 29, 2008) |  | $          | 0.008 |     | $ | 0.005 
|                                                            |  |           
|FISCAL 2007                                                 |  |            |       |     |   |       
|                                                            |  |           
|First Quarter (March 1, 2006 through May 31, 2006)          |  | $          | 0.02  |     | $ | 0.01  
|Second Quarter (June 1, 2006 through August 31, 2006)       |  | $          | 0.02  |     | $ | 0.01  
|Third Quarter (September 1, 2006 through November 30, 2006) |  | $          | 0.02  |     | $ | 0.01  
|Fourth Quarter (December 1, 2006 through February 28, 2007) |  | $          | 0.02  |     | $ | 0.01  

On February 29, 2008 the closing bid price of the Companys Common Stock as reported by the OTCBB was
$0.007 and there were approximately 1,204 shareholders of record.



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DIVIDENDS

The Company has
never declared or paid a dividend on its Common Stock, and does not anticipate paying any cash dividends on its Common Stock in the foreseeable future. The Company expects to retain, if any, its future earnings for expansion or development of the
Companys business. The decision to pay dividends, if any, in the future is within the discretion of the Board of Directors and will depend upon the Companys earnings, capital requirements, financial condition and other relevant factors
such as contractual obligations. There can be no assurance that dividends can or will ever be paid.

EQUITY COMPENSATION PLAN INFORMATION

The following table provides information about our Equity Compensation Plans.



|                                                                                        |  |                                                                     |  |                                            |      |                                                           |       
|--------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------- |  | ------------------------------------------ | ---- | --------------------------------------------------------- | ------
|Plan Category                                                                           |  | Number of securitiesto be issued uponexercise ofoutstanding options |  | Weightedaverage priceof outstandingoptions |      | Number ofsecuritiesremaining availablefor future issuance
|                                                                                        |  |                                                                    |  |                                            |     |                                                           |       
|Non-Qualified Option/Stock Appreciation Rights Plan approved by security holders        |  | 362,500                                                             |  | $                                          | 0.27 |                                                           | 57,400
|Employees Stock Incentive Plan approved by security holders                             |  |                                                                    |  |                                            |     |                                                           |      
|Non-Employee Directors and Consultants Retainer Stock Plan approved by security holders |  |                                                                    |  |                                            |     |                                                           |      

RECENT SALES OF UNREGISTERED SECURITIES

None



|ITEM 6. | MANAGEMENTS DISCUSSION AND ANALYSIS
|------- | ------------------------------------

This discussion is intended to
further the readers understanding of the Companys financial condition and results of operations, and should be read in conjunction with the Companys consolidated financial statements and related notes included elsewhere herein.
This discussion also contains forward-looking statements. The Companys actual results could differ materially from those anticipated in these forward-looking statements as a result of the risks and uncertainties set forth elsewhere in this
Annual Report and in the Companys other SEC filings. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. The Company is not party to any transactions that would be
considered off balance sheet pursuant to disclosure requirements under ITEM 303(c).

RESULTS OF OPERATIONS

The Company owns two subsidiaries that operated in the manufacturing segment and the fiberglass segment during the fiscal year ended February 29, 2008 and 2007. To
facilitate the readers understanding of the Companys financial performance, this discussion and analysis is presented on a segment basis.

MANUFACTURING SEGMENT

The manufacturing subsidiary, International Machine and Welding, Inc., generates its revenues from three divisions. Division
1 provides specialized machining and repair services to heavy industry and original equipment manufacturers. Division 2 provides repair and rebuild services on heavy equipment used in construction and mining as well as sales of used equipment.
Division 3 provides parts sales for heavy equipment directly to the customer. The primary market of this segment is the majority of central and south Florida with parts sales expanding its market internationally. The current operations can be
significantly expanded using the 38,000 square foot structure owned by International Machine and Welding, Inc.

FIBERGLASS SEGMENT

Chariot Manufacturing Company, which was acquired on October 11, 2003 from a related party, manufactures motorcycle trailers with fiberglass bodies. These trailers
are sold on the retail level. The company also provides non warranty repairs, modification of existing Chariot Trailers.



7



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##### Table of Contents

FISCAL YEAR 2008 COMPARED TO FISCAL YEAR 2007

General

The Companys consolidated net sales increased to $2,850,768 for the fiscal year ended February 29, 2008,
an increase of $499,480 or 21%, from $2,351,288 for the fiscal year ended February 28, 2007. The increase in net sales was due to a normal fluctuation in our customers requirements.

Gross profit for the consolidated operations increased to $1,213,454 for the fiscal year ended February 29, 2008 from $839,293 for the fiscal year ended
February 28, 2007. Gross profit as a percentage of sales increased in fiscal year 2008 to 43% from 36% in fiscal year ended 2007. The increase in gross profit margin was due to an emphasis on more profitable business, including the change in
the mix between machining and sales of parts and services and additional fees for services that the Company had previously not been charging for.

Consolidated interest expense in fiscal 2008 was $193,192 compared to $150,311 in fiscal 2007. The overall increase in interest expense was due to the Company increasing the amount of outstanding debt.

Selling, general and administrative expenses decreased to $2,057,215 for fiscal 2008 from $2,151,609 for fiscal 2007, a decrease of $94,394 or 4%. The decrease in
selling, general and administrative expenses is due to better control over costs.

The Company incurred a net consolidated loss of $1,036,246 for the year
ended February 29, 2008 compared to a loss of $1,450,388 for the year ended February 28, 2007. The decrease in the consolidated net loss is primarily due to the overall increase in revenues, while at the same time, controlling costs. As a
result of the continued losses, the Independent Auditors have questioned the Companys continuation as a going concern.

Manufacturing Segment

The manufacturing operation, International Machine and Welding, Inc. provided net sales of $2,640,796 for the fiscal year ended February 29, 2008
compared to $2,176,391 for the fiscal year ended February 28, 2007. The machining operations provided $818,280 or 31% of net sales with parts and service providing $1,822,516 or 69% of net sales for the fiscal year ended February 29, 2008
as compared to machining operations contributing $699,340 or 32% of net sales with parts and service providing $1,477,051 or 68% of net sales for the fiscal year ended February 28, 2007.

Gross profit from International Machine and Welding, Inc. was $1,195,589 for the fiscal year ended February 29, 2008 compared to $858,328 in fiscal 2007 providing
gross profit margins of 45% and 39%, respectively. This increase is due to the Company shifting its focus to more sales of parts and services where the margin is greater.

Selling, general and administrative expenses for International Machine and Welding, Inc. were $1,009,069 for the fiscal year ended February 29, 2008 compared to $975,859 for the fiscal year ended
February 28, 2007. The increase in selling, general and administrative expenses is due to an overall increase in payroll and payroll related expenses.

Interest expense was $138,405 for the fiscal year ended February 29, 2008 compared to $116,259 for the fiscal year ended February 28, 2007. The increase in interest expense, net is due to the full year of interest expense from the
Companys additional debt that had been taken on during the year ended February 29, 2008.

The Company does not have discrete financial
information on each of the three manufacturing divisions, nor does the Company make decisions on the divisions separately; therefore they are not reported as segments.

Fiberglass Segment

The fiberglass manufacturing operation, Chariot Manufacturing Company was acquired during the year ended
February 2004 and provided net sales of $209,972 for the fiscal year ended February 29, 2008 as compared to $174,897 for the fiscal year ended February 28, 2007. The increase in net sales was mainly due to completion of tooling and
concentration on sales.

Gross profit from Chariot was $17,864 for the fiscal year ended February 29, 2008 as compared to $(19,035) for the fiscal
year ended February 28, 2007 providing a gross profit margin of 9% and -11%, respectively. The increase in gross profit and the related gross profit margin was due to the prior year classification of additional labor and material expenses to
cost of goods sold without a related sale, the costs were incurred to maintain inventory, but were not of a capital nature. During 2008, the Company incurred labor and material in the tooling and molds project that could be capitalized.
In the prior year, there were no costs incurred that could be capitalized.



8



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##### Table of Contents

Selling, general and administrative expenses were $306,375 for 2008 and $314,593 for 2007. The decrease in selling,
general and administrative expenses was due to the reduction in the cost of goods sold during the period of substantial completion of the tooling assets which are not goods to be sold.

LIQUIDITY AND CAPITAL RESOURCES

During the fiscal years ended February 29, 2008 and February 28, 2007, the
Company used net cash for operating activities of $381,185 and $576,834, respectively. The decrease in use of cash is mainly due to the decrease in the net loss.

During the years ended February 29, 2008 and February 28, 2007, the Company (used) provided funds for investing activities of ($155,897) and $215,110, respectively. This increase in cash used from investing activities is mainly
due to acquisition of property and equipment.

During the years ended February 29, 2008 and February 28, 2007, the Company provided cash from
financing activities of $526,909 and $360,226, respectively. The increase in net cash provided by financing activities is due to an increase in the cash received from the issuance of notes payable.

Cash flows from investing and financing activities provided for working capital needs and principal payments on long-term debt through fiscal 2008. As of
February 29, 2008, the Company had a working capital deficit of $2,561,319. To the extent that the cash flows from investing and financing activities are insufficient to finance the Companys anticipated growth, or its other liquidity and
capital requirements during the next twelve months, the Company will seek additional financing from alternative sources including bank loans or other bank financing arrangements, other debt financing, the sale of equity securities (including those
issuable pursuant to the exercise of outstanding warrants and options), or other financing arrangements. However, there can be no assurance that any such financing will be available and, if available, that it will be available on terms favorable or
acceptable to the Company.

Management has revised its business strategy to include the manufacture of additional products. Although management has reduced
debt, new financing to finance operations and to facilitate additional production is still being sought. However, there can be no assurance that the Company will be able to raise capital, obtain debt financing, or improve operating results
sufficiently to continue as a going concern.

SEASONALITY

The
diversity of operations in the manufacturing segment protects it from seasonal trends except in the sales of agricultural processing where the majority of the revenue is generated while the processors await the next harvest.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The accompanying consolidated
financial statements include the activity of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. The preparation of consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company reviews its estimates, including but not limited to, recoverability of long-lived assets, recoverability of prepaid expenses
and allowance for doubtful accounts, on a regular basis and makes adjustments based on historical experiences and existing and expected future conditions. These evaluations are performed and adjustments are made as information is available.
Management believes that these estimates are reasonable; however, actual results could differ from these estimates.

We believe that the following critical
policies affect our more significant judgments and estimates used in preparation of our consolidated financial statements.

We maintain allowances for
doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. We base our estimate on an analysis of the Companys prior collection experience, customer credit worthiness, and current economic
trends. If the financial condition of our customers were to deteriorate, additional allowances may be required.

We value our inventories at the lower of
cost or market. Cost is determined on a standard cost basis that approximates the first-in, first-out method; market is determined based on net realizable value. We write down inventory balances for estimated obsolescence or unmarketable inventory
equal to the difference between the cost of the inventory and the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional
inventory write-downs may be required.



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##### Table of Contents

We value our property and equipment at cost. Amortization and depreciation are calculated using the straight-line and
accelerated methods of accounting over the estimated useful lives of the assets. Maintenance and repairs are charged to operations when incurred. Betterments and renewals are capitalized. When property and equipment are sold or otherwise disposed
of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations.

Fair value estimates used
in preparation of the consolidated financial statements are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their
fair values. These financial instruments include cash, accounts receivable, accounts payable, and accrued expenses. Fair values were assumed to approximate carrying values for these financial instruments since they are short-term in nature and their
carrying amounts approximate fair values or they are receivable or payable on demand. The fair value of the Companys notes payable is estimated based upon the quoted market prices for the same or similar issues or on the current rates offered
to the Company for debt of the same remaining maturities.

Deferred tax assets and liabilities are recognized for the estimated future tax consequences
attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective income tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period that included the
enactment date. See consolidated financial statements footnote 11.

NEW ACCOUNTING PRONOUNCEMENTS

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, The Fair Value Option for Financial Assets and Financial Liabilities
(SFAS 159). SFAS 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. SFAS 159 permits the measurement of specified
financial instruments and warranty and insurance contracts at fair value on a contract-by-contract basis, with changes in fair value recognized in earnings each reporting period. We do not anticipate that adoption of this statement will have a
material impact on our financial statements.

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141 (revised 2007),
Business Combinations (SFAS 141R). SFAS 141R establishes the principles and requirements for how an acquirer: 1) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities
assumed, and any non-controlling interest in the acquiree; 2) in a business combination achieved in stages, sometimes referred to as a step acquisition, recognizes the identifiable assets and liabilities, as well as the non-controlling interest
in the acquiree, at the full amounts of their fair values; 3) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase. SFAS 141R establishes disclosure requirements to enable users of the
financial statements to evaluate the nature and financial effects of the business combination. This Statement is to be applied prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual
reporting period on or after December 15, 2008. The adoption of SFAS 141R will have an impact on our accounting for future business combinations; however, the materiality of that impact cannot be determined.

In December 2007, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 110 (SAB 110) which allows companies that do not have
sufficient historical experience for estimating the expected term of plain vanilla share option grants to provide a reasonable estimate and to continue use of the simplified method after December 31, 2007. SAB 110
extends the opportunity to use the simplified method beyond December 31, 2007, as was allowed by Staff Accounting Bulletin No. 107 (SAB 107). Adoption of SAB 110 will not impact our financial statements as
we did not use the simplified method to estimate lives of share-based awards.

Other recent accounting pronouncements issued by the FASB
(including its EITF), the AICPA, and the SEC did not or are not believed by management to have a material impact on the Companys present or future financial statements.



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##### Table of Contents

|ITEM 7. | CONSOLIDATED FINANCIAL STATEMENTS
|------- | ---------------------------------

Consolidated Financial Statements

American Commerce Solutions, Inc. and Subsidiaries

As of February 29, 2008 and for the

Years Ended February 29, 2008 and February 28, 2007

Report of Independent Registered Public Accounting Firm



11



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##### Table of Contents

American Commerce Solutions, Inc. and Subsidiaries

Consolidated Financial Statements

As of
February 29, 2008 and

For the Years Ended February 29, 2008 and February 28, 2007



|                                                           |  |       
|---------------------------------------------------------- |  | ------
|Contents                                                   |  |       
|                                                           | 
|Report of Independent Registered Public Accounting Firm    |  | 13    
|                                                           | 
|Consolidated Financial Statements:                         |  |       
|                                                           | 
|Consolidated Balance Sheet                                 |  | 14    
|Consolidated Statements of Operations                      |  | 15    
|Consolidated Statements of Changes in Stockholders Equity |  | 16    
|Consolidated Statements of Cash Flows                      |  | 17    
|Notes to Consolidated Financial Statements                 |  | 18 -26



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##### Table of Contents

Report of Independent Registered Public Accounting Firm

Stockholders and Board of Directors

American Commerce Solutions, Inc. and Subsidiaries

Bartow, Florida

We have audited the accompanying consolidated balance sheet of American Commerce Solutions, Inc. and Subsidiaries as of February 29, 2008 and the
related consolidated statements of operations, changes in stockholders equity and cash flows for the years ended February 29, 2008 and February 28, 2007. These consolidated financial statements are the responsibility of the
management of American Commerce Solutions, Inc. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of American Commerce Solutions, Inc. and Subsidiaries as of February 29, 2008 and the results of its
operations and its cash flows for the years ended February 29, 2008 and February 28, 2007 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2, the Company
incurred a net loss of $1,036,246 during the year ended February 29, 2008 and has an accumulated deficit of $18,250,936 and negative working capital of $2,561,319 at February 29, 2008. In addition, the Company is in default on several
notes payable at February 29, 2008. These factors, among others, raise substantial doubt about the Companys ability to continue as a going concern. Managements plans in regard to these matters are also described in Note 2. The
consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Pender Newkirk & Company
LLP

Certified Public Accountants

Tampa, Florida

April 18, 2008



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##### Table of Contents

American Commerce Solutions, Inc. and Subsidiaries

Consolidated Balance Sheet

February 29, 2008



|                                                                                                                                                       |  |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------------------ |  | - | ----------- | -
|Assets                                                                                                                                                 |  |   |             |  
|Current assets:                                                                                                                                        |  |   |             |  
|Cash                                                                                                                                                   |  | $ | 6,461       |  
|Accounts receivable, net of allowance of $1,328                                                                                                        |  |   | 36,260      |  
|Accounts receivable, factored                                                                                                                          |  |   | 57,104      |  
|Inventories                                                                                                                                            |  |   | 210,096     |  
|Other receivables                                                                                                                                      |  |   | 47,123      |  
|Other current assets                                                                                                                                   |  |   | 39,699      |  
|                                                                                                                                                       |  |   |             |  
|Total current assets                                                                                                                                   |  |   | 396,743     |  
|                                                                                                                                                       | 
|Property and equipment, net of accumulated depreciation of $2,630,808                                                                                  |  |   | 4,702,248   |  
|                                                                                                                                                       | 
|Intangible assets, net of accumulated amortization of $166,778                                                                                         |  |   | 23,222      |  
|                                                                                                                                                       |  |   |             |  
|                                                                                                                                                       |  | $ | 5,122,213   |  
|                                                                                                                                                       |  |   |             |  
|Liabilities and Stockholders Equity                                                                                                                   |  |   |             |  
|Current liabilities:                                                                                                                                   |  |   |             |  
|Current portion of notes payable                                                                                                                       |  | $ | 1,349,377   |  
|Current portion of notes payable, related party                                                                                                        |  |   | 591,336     |  
|Bank overdraft                                                                                                                                         |  |   | 6,571       |  
|Accounts payable; including related party balances of $216,158                                                                                         |  |   | 507,290     |  
|Accrued expenses                                                                                                                                       |  |   | 178,377     |  
|Accrued interest                                                                                                                                       |  |   | 208,456     |  
|Deferred revenue                                                                                                                                       |  |   | 116,655     |  
|                                                                                                                                                       |  |   |             |  
|Total current liabilities                                                                                                                              |  |   | 2,958,062   |  
|                                                                                                                                                       |  |   |             |  
|Notes payable, net of current portion                                                                                                                  |  |   | 44,867      |  
|Due to stockholders                                                                                                                                    |  |   | 1,075,110   |  
|                                                                                                                                                       |  |   |             |  
|Total Liabilities                                                                                                                                      |  |   | 4,078,039   |  
|Stockholders equity:                                                                                                                                  |  |   |             |  
|Preferred stock, total authorized 5,000,000 shares:                                                                                                    |  |   |             |  
|Series A; cumulative and convertible; $.001 par value; 600 shares authorized; 102 shares issued and outstanding; liquidating preference
$376,125       |  |   |             |  
|Series B; cumulative and convertible; $.001 par value; 3,950 shares authorized; 3,944 shares issued and outstanding; liquidating preference
$3,944,617 |  |   | 3           |  
|Common stock; $.002 par value; 350,000,000 shares authorized; 251,272,293 shares issued; 250,750,293 shares outstanding                                |  |   | 502,545     |  
|Additional paid-in capital                                                                                                                             |  |   | 19,068,088  |  
|Stock subscription receivable                                                                                                                          |  |   | (10,000     | )
|Treasury stock, at cost                                                                                                                                |  |   | (265,526    | )
|Accumulated deficit                                                                                                                                    |  |   | (18,250,936 | )
|                                                                                                                                                       |  |   |             |  
|Total stockholders equity                                                                                                                             |  |   | 1,044,174   |  
|                                                                                                                                                       |  |   |             |  
|                                                                                                                                                       |  | $ | 5,122,213   |  
|                                                                                                                                                       |  |   |             |  

The accompanying notes are an integral part of the consolidated financial statements.



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##### Table of Contents

American Commerce Solutions, Inc. and Subsidiaries

Consolidated Statements of Operations



|                                                     |  |                   |             |   |                   |   |             |  
|---------------------------------------------------- |  | ----------------- | ----------- | - | ----------------- | - | ----------- | -
|                                                     |  | Years Ended       |            
|                                                     |  | February 29, 2008 |             |   | February 28, 2007 |  
|Net sales                                            |  | $                 | 2,850,768   |   |                   | $ | 2,351,288   |  
|                                                     |  |                  
|Cost of goods sold                                   |  |                   | 1,637,314   |   |                   |   | 1,511,995   |  
|                                                     |  |                   |             |   |                   |   |             |  
|Gross profit                                         |  |                   | 1,213,454   |   |                   |   | 839,293     |  
|                                                     |  |                   |             |   |                   |   |             |  
|Selling, general and administrative expenses         |  |                   | 2,057,215   |   |                   |   | 2,151,609   |  
|                                                     |  |                   |             |   |                   |   |             |  
|Loss from operations                                 |  |                   | (843,761    | ) |                   |   | (1,312,316  | )
|Other (expense) income:                              |  |                   |             |   |                   |   |             |  
|Other                                                |  |                   | 707         |   |                   |   | 12,239      |  
|Interest expense                                     |  |                   | (193,192    | ) |                   |   | (150,311    | )
|                                                     |  |                   |             |   |                   |   |             |  
|Total other (expense) income                         |  |                   | (192,485    | ) |                   |   | (138,072    | )
|                                                     |  |                   |             |   |                   |   |             |  
|Net loss                                             |  | $                 | (1,036,246  | ) |                   | $ | (1,450,388  | )
|                                                     |  |                   |             |   |                   |   |             |  
|Net loss per common share                            |  | $                 | (0.00       | ) |                   | $ | (0.01       | )
|                                                     |  |                   |             |   |                   |   |             |  
|Weighted average number of common shares outstanding |  |                   | 249,565,938 |   |                   |   | 237,735,752 |  
|                                                     |  |                   |             |   |                   |   |             |  

The accompanying notes are an integral part of the consolidated financial statements



15



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##### Table of Contents

American Commerce Solutions, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders Equity

Years Ended February 29, 2008 and February 28, 2007



|                                                      |  |              |  |                 |         |        |       |        |   |  
|----------------------------------------------------- |  | ------------ |  | --------------- | ------- | ------ | ----- | ------ | - | -
|                                                      |  | Common Stock |  | Preferred Stock
|                                                      |  | Shares       |  | Amount          |         | Shares |       | Amount
|Balance, February 28, 2006                            |  | 226,922,415  |  | $               | 453,845 |        | 3,944 |        | $ | 3
|                                                      |  |              |  |                
|Common shares issued for guaranty                     |  | 3,216,712    |  |                 | 6,434   |        |       |        |   |  
|Common shares issued for pledge of assets             |  | 6,433,424    |  |                 | 12,868  |        |       |        |   |  
|Common shares issued for services                     |  | 1,250,000    |  |                 | 2,500   |        |       |        |   |  
|Common shares issued for assignment of a note payable |  | 1,376,671    |  |                 | 2,753   |        |       |        |   |  
|Common shares issued for accrued expenses             |  | 340,095      |  |                 | 680     |        |       |        |   |  
|Net loss                                              |  |              |  |                 |         |        |       |        |   |  
|                                                      |  |              |  |                 |         |        |       |        |   |  
|Balance, February 28, 2007                            |  | 239,539,317  |  | $               | 479,080 |        | 3,944 |        | $ | 3
|                                                      |  |              |  |                
|Common shares issued for guaranty                     |  | 3,272,103    |  |                 | 6,544   |        |       |        |   |  
|Common shares issued for pledge of assets             |  | 6,544,206    |  |                 | 13,088  |        |       |        |   |  
|Common shares issued for assignment of a note payable |  | 1,916,667    |  |                 | 3,833   |        |       |        |   |  
|Net loss                                              |  |              |  |                 |         |        |       |        |   |  
|                                                      |  |              |  |                 |         |        |       |        |   |  
|Balance, February 29, 2008                            |  | 251,272,293  |  | $               | 502,545 |        | 3,944 |        | $ | 3
|                                                      |  |              |  |                 |         |        |       |        |   |  



|                          |  |                             |         |   |                    |   |             |               |  |   |            |   |       |   |  |  |   |            |  
|------------------------- |  | --------------------------- | ------- | - | ------------------ | - | ----------- | ------------- |  | - | ---------- | - | ----- | - |  |  | - | ---------- | -
|Additional Paid-InCapital |  | StockSubscriptionReceivable |         |   | AccumulatedDeficit |   |             | TreasuryStock |  |   | Loan Costs |   | Total |  
|$ 18,822,111              |  | $                           | (10,000 | ) |                    | $ | (15,764,302 | )             |  | $ | (265,526   | ) |       | $ |  |  | $ | 3,236,131  |  
|33,486                    |  |                             |         |   |                    |   |             |               |  |   |            |   |       |   |  |  |   | 39,920     |  
|66,972                    |  |                             |         |   |                    |   |             |               |  |   |            |   |       |   |  |  |   | 79,840     |  
|8,125                     |  |                             |         |   |                    |   |             |               |  |   |            |   |       |   |  |  |   | 10,625     |  
|15,695                    |  |                             |         |   |                    |   |             |               |  |   |            |   |       |   |  |  |   | 18,448     |  
|9,522                     |  |                             |         |   |                    |   |             |               |  |   |            |   |       |   |  |  |   | 10,202     |  
|                          |  |                             |         |   |                    |   | (1,450,388  | )             |  |   |            |   |       |   |  |  |   | (1,450,388 | )
|                          |  |                             |         |   |                    |   |             |               |  |   |            |   |       |   |  |  |   |            |  
|$18,955,911               |  | $                           | (10,000 | ) |                    | $ | (17,214,690 | )             |  | $ | (265,526   | ) |       | $ |  |  | $ | 1,944,778  |  
|31,003                    |  |                             |         |   |                    |   |             |               |  |   |            |   |       |   |  |  |   | 37,547     |  
|62,007                    |  |                             |         |   |                    |   |             |               |  |   |            |   |       |   |  |  |   | 75,095     |  
|19,167                    |  |                             |         |   |                    |   |             |               |  |   |            |   |       |   |  |  |   | 23,000     |  
|                          |  |                             |         |   |                    |   | (1,036,246  | )             |  |   |            |   |       |   |  |  |   | (1,036,246 | )
|                          |  |                             |         |   |                    |   |             |               |  |   |            |   |       |   |  |  |   |            |  
|$19,068,088               |  | $                           | (10,000 | ) |                    | $ | (18,250,936 | )             |  | $ | (265,526   | ) |       | $ |  |  | $ | 1,044,174  |  
|                          |  |                             |         |   |                    |   |             |               |  |   |            |   |       |   |  |  |   |            |  

The accompanying notes are an integral part of the consolidated financial statements



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##### Table of Contents

American Commerce Solutions, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

For the Years Ended February 29, 2008 and February 28, 2007



|                                                                                                  |  |      |            |   |      |   |            |  
|------------------------------------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | -
|                                                                                                  |  | 2008 |            |   | 2007 |  
|Operating activities:                                                                             |  |      |            |   |      |   |            |  
|Net loss                                                                                          |  | $    | (1,036,246 | ) |      | $ | (1,450,388 | )
|Adjustments to reconcile net loss to net cash used by operating activities:                       |  |      |            |   |      |   |            |  
|Depreciation and amortization                                                                     |  |      | 417,293    |   |      |   | 429,729    |  
|Stock issued for services                                                                         |  |      |            |   |      |   | 130,385    |  
|Amortization of loan costs                                                                        |  |      | 112,642    |   |      |   |            |  
|Loss (gain) on disposal of property                                                               |  |      | 2,202      |   |      |   | (4,500     | )
|(Decrease) increase in allowance for doubtful accounts                                            |  |      | (1,296     | ) |      |   | 15,624     |  
|Decrease (increase) in:                                                                           |  |      |            |   |      |   |            |  
|Accounts receivables                                                                              |  |      | 32,430     |   |      |   | (52,882    | )
|Inventories                                                                                       |  |      | 3,703      |   |      |   | (65,265    | )
|Other receivables and other assets                                                                |  |      | 83         |   |      |   | 59,442     |  
|Increase in:                                                                                      |  |      |            |   |      |   |            |  
|Accounts payable and accrued expenses                                                             |  |      | 84,108     |   |      |   | 289,820    |  
|Deferred income                                                                                   |  |      | 3,896      |   |      |   | 71,201     |  
|                                                                                                  |  |      |            |   |      |   |            |  
|Net cash used by operating activities                                                             |  |      | (381,185   | ) |      |   | (576,834   | )
|                                                                                                  |  |      |            |   |      |   |            |  
|Investing activities:                                                                             |  |      |            |   |      |   |            |  
|Decrease in other receivables                                                                     |  |      | 13,625     |   |      |   | 49,701     |  
|Payments received on note receivable                                                              |  |      |            |   |      |   | 239,016    |  
|Proceeds from sale of assets                                                                      |  |      |            |   |      |   | 4,500      |  
|Acquisition of property and equipment                                                             |  |      | (169,522   | ) |      |   | (78,107    | )
|                                                                                                  |  |      |            |   |      |   |            |  
|Net cash (used) provided by investing activities                                                  |  |      | (155,897   | ) |      |   | 215,110    |  
|                                                                                                  |  |      |            |   |      |   |            |  
|Financing activities:                                                                             |  |      |            |   |      |   |            |  
|(Decrease) increase in bank overdraft                                                             |  |      | (4,602     | ) |      |   | 11,173     |  
|Decrease (increase) in due from factor                                                            |  |      | 2,349      |   |      |   | (17,041    | )
|Proceeds from notes payable and long-term debt                                                    |  |      | 602,831    |   |      |   | 239,585    |  
|Principal payments on notes payable and capital leases                                            |  |      | (306,069   | ) |      |   | (129,391   | )
|Increase in advances from stockholders                                                            |  |      | 232,400    |   |      |   | 255,900    |  
|                                                                                                  |  |      |            |   |      |   |            |  
|Net cash provided by financing activities                                                         |  |      | 526,909    |   |      |   | 360,226    |  
|                                                                                                  |  |      |            |   |      |   |            |  
|Net decrease in cash                                                                              |  |      | (10,173    | ) |      |   | (1,498     | )
|                                                                                                  |  |     
|Cash, beginning of year                                                                           |  |      | 16,634     |   |      |   | 18,132     |  
|                                                                                                  |  |      |            |   |      |   |            |  
|Cash, end of year                                                                                 |  | $    | 6,461      |   |      | $ | 16,634     |  
|                                                                                                  |  |      |            |   |      |   |            |  
|Supplemental disclosures of cash flow information and noncash investing and financing activities: |  |      |            |   |      |   |            |  
|Cash paid during the period for interest                                                          |  | $    | 137,149    |   |      | $ | 120,786    |  
|                                                                                                  |  |      |            |   |      |   |            |  

During the years ended February 29, 2008 and February 28, 2007, the Company increased notes payable by
$24,265 and $24,418 respectively for an accrual of interest.

During the year ended February 29, 2008, the Company issued 1,916,667 shares of common
in relief of a note payable and related accrued interest, valued at $23,000.

During the years ended February 29, 2008 and February 28, 2007, the
Company issued 9,816,309 and 9,650,136 shares of common stock to a related party and related company, respectively, valued at $112,642 and $119,758, respectively, in exchange for guarantees of a note payable. As of February 29, 2008 and
February 28, 2007, all of these guarantee fees have been amortized.

During the year ended February 28, 2007, the Company issued 340,095 shares
of common stock for repayment of $10,202 worth of accrued expenses.

During the year ended February 28, 2007, the Company issued 1,376,671 shares of
common stock, valued at $18,448, for the assignment of a note payable.

The accompanying notes are an integral part of the consolidated financial
statements.



17



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##### Table of Contents

American Commerce Solutions, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

As of February 29, 2008 and for the

Years Ended February 29, 2008 and February 28, 2007

1. BACKGROUND INFORMATION

American Commerce Solutions, Inc. was incorporated in Rhode Island in 1991 under the name Jaque Dubois, Inc., and was re-incorporated in Delaware in 1994. In July 1995,
Jaque Dubois, Inc. changed its name to JD American Workwear, Inc. In December 2000, the stockholders voted at the annual stockholders meeting to change the name of JD American Workwear, Inc. to American Commerce Solutions, Inc. (the
Company).

The Company is primarily a holding company with two wholly owned subsidiaries; International Machine and Welding, Inc. is engaged in
the machining and fabrication of parts used in industry, and parts sales and service for heavy construction equipment; Chariot Manufacturing Company, Inc., which was acquired on October 11, 2003 from a related party, manufactures motorcycle
trailers with fiberglass bodies.

2. GOING CONCERN

The
Company has incurred substantial operating losses since inception and has used approximately $381,185 of cash in operations for the year ended February 29, 2008. The Company recorded losses from continuing operations of $1,036,246 and
$1,450,388 for the years ended February 29, 2008 and February 28, 2007, respectively. Current liabilities exceed current assets by $2,561,319 at February 29, 2008. Additionally, the Company is in default on several notes payable.
These factors raise substantial doubt about the Companys ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon its ability to reverse negative operating trends, raise additional
capital, and obtain debt financing.

Management has revised its business strategy to include expansion into other lines of business through the acquisition
of other companies in exchange for the Companys stock to facilitate manufacturing contracts under negotiation. In conjunction with the anticipated new contracts, management is currently negotiating new debt and equity financing, the proceeds
from which would be used to settle outstanding debts at more favorable terms, to finance operations, and to complete additional business acquisitions. However, there can be no assurance that the Company will be able to raise capital, obtain debt
financing, or improve operating results sufficiently to continue as a going concern.

The accompanying consolidated financial statements do not include any
adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary if the Company is unable to continue as a going concern.

3. SIGNIFICANT ACCOUNTING POLICIES

The significant accounting
policies followed are:

The accompanying consolidated financial statements include the activity of the Company and its wholly owned
subsidiaries. All intercompany transactions have been eliminated in consolidation.

The preparation of consolidated financial statements in
conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable. Accounts receivable
consist of billed services or products. The Company records an allowance for doubtful accounts to allow for any amounts that may not be recoverable, which is based on an analysis of the Companys prior collection experience, customer credit
worthiness, and current economic trends. Based on managements review of accounts receivable, an allowance for doubtful accounts of $1,328 is considered adequate at February 29, 2008. Receivables are determined to be past due based on
payment terms of original invoices. The Company does not charge significant amounts of interest on past due receivables.



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##### Table of Contents

The Company follows SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities to account for its factoring of accounts receivable by selling and assigning all rights, title, and interest to certain of the Companys accounts receivable. The Company receives 80% of all approved
invoices sold to the Factoring Company, which assumes the credit risk. Based on the Factoring Companys collections of these invoices the Company may receive additional consideration of up to 18%. The Company records the 80% as payment against
the invoices sold and records 18% as an amount due from Factoring Company. Once the invoice exceeds 120 days outstanding, the remaining 18% of the receivable is recorded as expense.

Inventories are stated at the lower of cost or market. Cost is determined on a standard cost basis that approximates the first-in, first-out method;
market is determined based on net realizable value. Appropriate consideration is given to obsolescence, excessive levels, deterioration, and other factors in evaluating net realizable value.

Property and equipment are stated at cost. Depreciation and amortization expense are calculated using the straight-line and accelerated methods of
accounting over the following estimated useful lives of the assets:



|                               |  |              
|------------------------------ |  | -------------
|Building and improvements      |  | 15 - 39 years
|Machine and equipment          |  | 5 - 30 years 
|Office furniture and equipment |  | 5 - 10 years 
|Trucks and vehicles            |  | 5 - 7 years  

Maintenance and repairs are charged to operations when incurred. Betterments and renewals are
capitalized. When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations.

Acquired identifiable intangible assets with a cost of approximately $190,000 consist of values assigned to brand recognition, customer list and web site
of Chariot Manufacturing Company. These intangibles are amortized on a straight-line method over 5 years. During the years ended February 29, 2008 and February 28, 2007, approximately $38,000 was recognized as amortization expense related
to these identifiable intangible assets.

Direct costs incurred with the issuance of notes payable are deferred and amortized over the life
of the guaranty. As of February 29, 2008 and February 28, 2007, the Company incurred amortization expense of $112,642 and $119,760, respectively.

The Company records amounts billed to customers for shipping and handling costs as sales revenue. Costs incurred by the Company for shipping and handlings are included in cost of sales.

Sales are recorded when products, repairs, or parts are delivered to the customer. Provisions for discounts and rebates to customers, estimated returns,
allowances, and other adjustments are provided for in the same period the related sales are recorded. No products or parts are delivered with any contingencies except for defects.

The Company has adopted SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS No. 144 addresses the
financial accounting and reporting for the impairment of long-lived assets, excluding goodwill and intangible assets, to be held and used or disposed of. The adoption of SFAS No. 144 did not have an impact on the Companys financial
position or results of operations. In accordance with SFAS No. 144, the carrying values of long-lived assets are periodically reviewed by the Company and impairments would be recognized if the expected future operating non-discounted cash flows
derived from an asset were less than its carrying value and if the carrying value is more than the fair value of the asset. At February 29, 2008, the Company did not have any asset that it considered impaired.

The Company previously applied the intrinsic value method provisions of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations for stock-based compensation. Accordingly, the Company recognized compensation expense on our restricted stock awards, but no compensation expense was recognized for fixed option plans as all option grants
under the plan had an exercise price equal or greater to the fair market value of the underlying common stock on the date of grant. As permitted, the Company had previously elected to adopt the disclosure-only provisions of Statement of Financial
Accounting Standard No. 123, Accounting for Stock-Based Compensation.



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##### Table of Contents

In December 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based Payment
(SFAS 123R), which replaces SFAS No. 123; Accounting for Stock-Based Compensation, (SFAS 123) and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, (APB 25).
SFAS 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. Under SFAS 123R, the Company is required to measure the cost of
employee services received in exchange for stock options and similar awards based on the grant-date fair value of the award and recognize this cost in the income statement over the period during which an employee is required to provide service in
exchange for the award. The pro forma disclosures previously permitted under SFAS 123 are no longer an alternative to financial statement recognition. The Company adopted SFAS 123R using the modified prospective method, which did not
require the recognition of any non-cash charges, as there were no unvested stock options on that date.

The fair value concepts were not
changed significantly in FAS 123R; however, in adopting FAS 123R, companies must choose among alternative valuation models and amortization assumptions. After assessing alternative valuation models and amortization assumptions, the Company will
continue using the Black-Scholes valuation model and has elected to use the ratable method to amortize compensation expense over the vesting period of the grant.

The value of each grant under FAS 123R is estimated at the grant date using the Black-Scholes option model. There were no options granted during the years ended February 29, 2008 and February 28, 2007.

During 2008 and 2007, there was $0 of cash received from the exercise of stock options.

The aggregate intrinsic value of options outstanding and exercisable at February 29, 2008, based on the Companys closing stock price of $0.007
as of the last business day of the year ended February 29, 2008, which would have been received by the optionees had all options been exercised on that date was $0. There were no options exercised during the years ended February 29, 2008
and February 28, 2007.

At February 29, 2008, the Company has two stock-based employee compensation plans, all of which have been
approved by the shareholders. The Company did not incur any stock-based employee compensation during the years ended February 29, 2008 and February 28, 2007.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet financial instruments
approximated their fair values. These financial instruments include cash, accounts receivable, accounts payable, and accrued expenses. Fair values were assumed to approximate carrying values for these financial instruments since they are short-term
in nature and their carrying amounts approximate fair values or they are receivable or payable on demand. The fair value of the Companys notes payable is estimated based upon the quoted market prices for the same or similar issues or on the
current rates offered to the Company for debt of the same remaining maturities and approximates the carrying amounts of the notes.

Deferred
tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective income tax bases.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized as income in the period that included the enactment date. Due to the Companys continued losses, the Company has placed a full valuation allowance against the deferred tax asset.

The Company records stock as issued at the time consideration is received or the obligation is incurred.

Earnings per common share are computed in accordance with SFAS No. 128, Earnings per Share, which requires companies to present basic
earnings per share and diluted earnings per share. Basic earnings per share are computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share are computed by
dividing net income by the weighted average number of shares of common stock outstanding and dilutive options outstanding during the year. The diluted weighted average number of shares was 249,658,419 and 237,735,752 for the years ended
February 29, 2008 and February 28, 2007, respectively.

In July 2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 48, (FIN 48) Accounting for uncertainty in income taxes  an interpretation of SFAS No. 109. This Interpretation provides guidance for recognizing and measuring uncertain tax positions, as
defined in FASB No. 109, Accounting for income taxes. FIN 48 prescribes a threshold condition that a tax position must meet for any of the benefit of an uncertain tax position to be recognized in the financial
statements. Guidance is also provided regarding derecognition, classification and disclosure of uncertain tax positions. FIN 48 is effective for fiscal years beginning after December 15, 2006. The implementation did not have a
material impact on the Companys financial position, results of operations or cash flows.



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##### Table of Contents

In September 2006, the FASB issued SFAS No. 157 (SFAS 157), Fair Value
Measurements. SFAS 157 clarifies the principle that fair value should be based on the assumptions that market participants would use when pricing an asset or liability. Additionally, it establishes a fair value hierarchy that prioritizes the
information used to develop those assumptions. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company does not expect the adoption of SFAS 157 to have a material impact on their
financial position, results of operations or cash flows.

In February 2007, the FASB issued Statement of Financial Accounting Standards
No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS 159). SFAS 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods
within those fiscal years. SFAS 159 permits the measurement of specified financial instruments and warranty and insurance contracts at fair value on a contract-by-contract basis, with changes in fair value recognized in earnings each reporting
period. We do not anticipate that adoption of this statement will have a material impact on our financial statements.

In December 2007, the
FASB issued Statement of Financial Accounting Standards No. 141 (revised 2007), Business Combinations (SFAS 141R). SFAS 141R establishes the principles and requirements for how an acquirer: 1) recognizes and measures
in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree; 2) in a business combination achieved in stages, sometimes referred to as a step acquisition, recognizes
the identifiable assets and liabilities, as well as the non-controlling interest in the acquiree, at the full amounts of their fair values; 3) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain
purchase. SFAS 141R establishes disclosure requirements to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This Statement is to be applied prospectively to business combinations
for which the acquisition date is on or after the beginning of the first annual reporting period on or after December 15, 2008. The adoption of SFAS 141R will have an impact on our accounting for future business combinations; however, the
materiality of that impact cannot be determined.

In December 2007, the Securities and Exchange Commission issued Staff Accounting Bulletin
No. 110 (SAB 110) which allows companies that do not have sufficient historical experience for estimating the expected term of plain vanilla share option grants to provide a reasonable estimate and to continue use
of the simplified method after December 31, 2007. SAB 110 extends the opportunity to use the simplified method beyond December 31, 2007, as was allowed by Staff Accounting Bulletin No. 107
(SAB 107). Adoption of SAB 110 will not impact our financial statements as we did not use the simplified method to estimate lives of share-based awards.

Other recent accounting pronouncements issued by the FASB (including its EITF), the AICPA, and the SEC did not or are not believed by management to have a
material impact on the Companys present or future financial statements.

4. ACCOUNTS RECEIVABLE, FACTORED

During the year ended February 29, 2008, the Company factored receivables of approximately $1,942,662. In connection with the factoring agreement, the Company
incurred fees of approximately $69,300 and $52,000 during the years ended February 29, 2008 and February 28, 2007, respectively. As of February 29, 2008, certain customers had remitted $16,237 to the Company on factored receivables,
the Company has recorded this amount as due to the factor and is included in accrued expenses on the accompanying consolidated balance sheet. Any and all of the Companys indebtedness and obligations to the Factoring Company is guaranteed by
two stockholders and collateralized by the Companys inventory and fixed assets.

5. INVENTORIES

Inventories consist of the following at February 29, 2008:



|                  |  |   |        
|----------------- |  | - | -------
|Work-in-process   |  | $ | 15,941 
|Raw materials     |  |   | 194,155
|                  |  |   |        
|Total inventories |  | $ | 210,096
|                  |  |   |        

6. PROPERTY AND EQUIPMENT

Property and equipment at February 29, 2008 consist of:



|                               |  |   |          
|------------------------------ |  | - | ---------
|Land                           |  | $ | 186,045  
|Building and improvements      |  |   | 2,797,268
|Machinery and equipment        |  |   | 3,696,831
|Office furniture and equipment |  |   | 91,756   
|Trucks and automobiles         |  |   | 382,395  
|Equipment held for lease       |  |   | 178,761  
|                               |  |   |          
|                               |  |   | 7,333,056
|Less accumulated depreciation  |  |   | 2,630,808
|                               |  |   |          
|                               |  | $ | 4,702,248
|                               |  |   |          



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##### Table of Contents

Depreciation expense for the years ended February 29, 2008 and February 28, 2007 was $379,293 and $391,729,
respectively.

7. INTANGIBLE ASSETS

The following is a
summary of intangible assets at February 29, 2008



|                  |  |              |         |                          |   |        
|----------------- |  | ------------ | ------- | ------------------------ | - | -------
|                  |  | Gross Amount |         | Accumulated Amortization
|Web Site          |  | $            | 86,125  |                          | $ | 75,599 
|Brand Recognition |  |              | 59,455  |                          |   | 52,188 
|Customer List     |  |              | 44,420  |                          |   | 38,991 
|                  |  |              |         |                          |   |        
|                  |  | $            | 190,000 |                          | $ | 166,778
|                  |  |              |         |                          |   |        

Amortization expense for the years ended February 29, 2008 and February 28, 2007 was $38,000 and
$38,000; respectively, and estimated amortization expense through February 28, 2009 is $23,222.

8. NOTES PAYABLE

Notes payable at February 29, 2008 consist of:



|                                                                                                                                                      |  |   |        
|----------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | -------
|Notes payable to the parents of the former president of the Company, stockholders; 10% interest, past maturity, unsecured                             |  | $ | 185,291
|Notes payable to the parents and sister of the former president of the Company; stockholders; 10% interest; past maturity;
unsecured                  |  |   | 31,697 
|Note payable; 14.66% interest; monthly payments of principal and interest of $278; due October 18, 2008; collateralized by
equipment                  |  |   | 2,108  
|Note payable; related party; no interest; past maturity, unsecured                                                                                    |  |   | 29,304 
|Note payable; related party; 12% interest; due on demand; unsecured                                                                                   |  |   | 72,147 
|Notes payable; related party; interest payable in the amount of $1,000; due on demand; unsecured                                                      |  |   | 5,850  
|Note payable; related party; 3% fee for the first 30 days, 16.5% interest thereafter; due on demand; convertible into common stock at $0.01
per share |  |   | 48,000 
|Note payable; related party; 3% fee for the first 30 days, 16.5% interest thereafter; due on demand; convertible into common stock at $0.01
per share |  |   | 49,500 
|Note payable; related party; 3% fee for the first 30 days, 16.5% interest thereafter; due on demand; convertible into common stock at $0.01
per share |  |   | 60,000 
|Note payable; related party; 8% interest; due on demand, unsecured                                                                                    |  |   | 13,936 
|Note payable; related party; 15% interest; due on demand; unsecured                                                                                   |  |   | 67,021 
|Note payable; related party; 10% interest; due on demand; unsecured                                                                                   |  |   | 9,654  
|Note payable; related party; no interest; past maturity; unsecured                                                                                    |  |   | 20,205 
|Note payable; related party; 18% interest; due on demand; unsecured                                                                                   |  |   | 570    
|Note payable; related party; 18% interest; due on demand; unsecured                                                                                   |  |   | 59,195 
|Note payable; related party; 15% interest; due on demand; unsecured                                                                                   |  |   | 24,416 
|Notes payable; related party; 15% interest; due on demand; unsecured                                                                                  |  |   | 25,650 
|Notes payable, individual, past maturity, interest payable in the amount of $10,000, in addition to principal, unsecured                              |  |   | 10,000 
|Note payable; related party; 6.50% interest; due 2010; secured by vehicle                                                                             |  |   | 9,312  
|Note payable; related party; 15% interest; due on demand; unsecured                                                                                   |  |   | 300    
|Note payable; related party; 15% interest; due on demand; unsecured                                                                                   |  |   | 30,582 
|Note payable; related party; 15% interest; due on demand; unsecured                                                                                   |  |   | 17,375 
|Note payable; related party; 12% interest; due on demand; unsecured                                                                                   |  |   | 6,000  
|Note payable; related party; 8% interest; due on demand; unsecured                                                                                    |  |   | 5,000  
|Note payable; related party; 15% interest; monthly principal and interest payments of $970; past maturity; unsecured                                  |  |   | 13,189 
|Note payable; 13.70% interest; monthly principle and interest payments of $1,490; due February 12, 2009; secured by a
vehicle                         |  |   | 15,231 



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|                                                                                                                                                                                                                                                                                         |  |   |            |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ---------- | -
|Note payable; related party; 10% interest; due on demand; unsecured                                                                                                                                                                                                                      |  |   | 18,800     |  
|Note payable; 20% interest; due on demand; unsecured                                                                                                                                                                                                                                     |  |   | 13,000     |  
|Note payable; 8.5% interest; due March 9, 2022; secured by trailer                                                                                                                                                                                                                       |  |   | 28,804     |  
|Note payable; 10.99% interest; matures December 14, 2011; secured by a 16 foot enclosed trailer                                                                                                                                                                                          |  |   | 18,375     |  
|Note payable; related party; 7% interest; due on demand; unsecured                                                                                                                                                                                                                       |  |   | 8,392      |  
|Note payable to Internal Revenue Service pursuant to a Chapter 11 reorganization plan; 8% interest; secured by tax lien; monthly payments of
$1,500 of principal and interest; past maturity                                                                                             |  |   | 364,750    |  
|Note payable to a financial institution; 7.5% interest; monthly principal and interest payments of $6,756; collateralized by fixed assets, key
man life insurance policy and 1,000,000 shares of common stock owned by a stockholder; guaranteed by a stockholder; due December 30, 2008 |  |   | 721,926    |  
|                                                                                                                                                                                                                                                                                         |  |   |            |  
|                                                                                                                                                                                                                                                                                         |  |   | 1,985,580  |  
|Less current portion                                                                                                                                                                                                                                                                     |  |   | (1,940,713 | )
|                                                                                                                                                                                                                                                                                         |  |   |            |  
|                                                                                                                                                                                                                                                                                         |  | $ | 44,867     |  
|                                                                                                                                                                                                                                                                                         |  |   |            |  

As of February 29, 2008, the notes payable listed above include $654,436, which are currently in default.

The aggregate principal maturing in subsequent years is:



|                         |  |   |          
|------------------------ |  | - | ---------
|Year Ending February 28, |  |  
|2009                     |  | $ | 1,940,713
|2010                     |  |   | 9,024    
|2011                     |  |   | 6,610    
|2012                     |  |   | 6,345    
|2013                     |  |   | 1,819    
|Thereafter               |  |   | 21,069   
|                         |  |   |          
|                         |  | $ | 1,985,580
|                         |  |   |          

The above notes payable to related parties in the amount of $591,336 are not necessarily indicative of the terms
and amounts that would have been incurred had comparable agreements been made with independent parties.

9. CONVERTIBLE PREFERRED STOCK

Holders of Series A convertible preferred stocks vote on a converted basis with the common stockholders on all matters to be brought to a vote of the stockholders.
Each share of Series A convertible preferred stock can be converted into 1,289 shares of common stock. Dividends are payable in kind at the Companys option at a rate of ten percent annually. Payments of annual dividends have been deferred by
the Companys Board of Directors on the outstanding Series A shares because of losses sustained by the Company. As of February 29, 2008, preferred dividends in arrears amounted to $118,377 or $1,161 per share.

The Series B convertible preferred stock has rights to receive cumulative six percent in kind dividends in preference to the payment of dividends on all other shares of
capital stock of the Company. No dividends may be declared or paid on any other shares of stock until the full amount of the cumulative dividends on the Series B preferred stock has been paid. Each share of Series B convertible preferred stock can
be converted into 1,000 shares of common stock. Cumulative dividends amounted to $1,053,102 and $766,213 at February 29, 2008 and February 28, 2007, respectively. Dividends may be paid in stock through May 31, 2004 at a conversion
rate of $1.00 per share. For the years ended February 29, 2008 and February 28, 2007, no dividends were paid with additional shares of preferred stock.

Holders of Series B preferred stock vote on a converted basis with the common stockholders on all matters to be brought to a vote of the stockholders. The Series B preferred stockholders are entitled to elect one director out of the seven
authorized directors of the Companys board.

10. CAPITALIZATION

On July 10, 2002, the Company adopted a Non-Qualified Option/Stock Appreciation Rights Plan that authorizes 7,000,000 shares of common stock for grant to key management employees or consultants. Options granted
under the plan must be exercised within ten years of the date of grant. The exercise price of options shall not be less than par value and shall be determined by the Stock Option Plan Committee and the Board of Directors. As of February 29,
2008, the Company has 57,400 options available for future issuance under this plan.



23



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During the year ended February 29, 2004, the Company adopted an employee stock incentive plan (the Plan)
that authorizes up to 20,000,000 shares of common stock for grants of both incentive stock options and non-qualified stock options to designated officers, employees, and certain non-employees. Effective July 2003, October 2003 and August 2004,
the Company amended this plan to include an additional 20,000,000, 25,000,000 and 20,000,000 shares of common stock, respectively. Effective December 2004, the Company amended the plan to reduce the number of shares of common stock by 7,000,000
shares. Options granted under the Plan must be exercised within 10 years of the date of grant. The exercise price of options granted may not be less than 85 percent of the fair market value of the stock. As of February 28, 2008, the Company has
issued all of the options available under this plan.

During the year ended February 29, 2004, the Company also adopted a non-employee directors and
consultants retainer stock plan. This plan authorizes up to 5,000,000 shares of common stock to be issued in the amount of compensation for services to directors and consultants at the deemed issuance price of not less than 85 percent of the fair
market value of the stock. Effective July 2003, October 2003 and December 2004, the Company amended this plan to include an additional 1,000,000, 15,000,000 and 7,000,000 shares of common stock, respectively. As of February 29, 2008, the
Company has issued all of the options available under this plan.

A summary of the Companys stock option activity is as follows:



|                                       |  |                 |  |                                        
|-------------------------------------- |  | --------------- |  | ---------------------------------------
|                                       |  | Numberof Shares |  | Weighted-AverageExercise Priceper Share
|Options outstanding, February 28, 2006 |  | 362,500         |  | 0.27                                   
|Granted                                |  | 0               |  |                                        
|Exercised                              |  | 0               |  |                                        
|Expired, forfeited                     |  | 0               |  |                                        
|                                       |  |                
|Options outstanding, February 28, 2007 |  | 362,500         |  | 0.27                                   
|                                       |  |                
|Granted                                |  | 0               |  |                                        
|Exercised                              |  | 0               |  |                                        
|Expired, forfeited                     |  | 0               |  |                                        
|Options outstanding, February 29, 2008 |  | 362,500         |  | 0.27                                   

The following table summarizes information about options outstanding and exercisable as of February 29, 2008:



|                        |  |                     |  |                                |  |                       |      |                                |            |                   |         |                       |   |     
|----------------------- |  | ------------------- |  | ------------------------------ |  | --------------------- | ---- | ------------------------------ | ---------- | ----------------- | ------- | --------------------- | - | ----
|                        |  | Outstanding Options |  | Exercisable Options           
|Range of Exercise Price |  | NumberOutstanding   |  | Weighted AverageRemaining Life |  | Weighted AveragePrice |      | Weighted AverageRemaining Life |            | NumberExercisable |         | Weighted AveragePrice
|$0.04-$0.57             |  | 362,500             |  | 4.29 years                     |  | $                     | 0.27 |                                | 4.29 years |                   | 362,500 |                       | $ | 0.27

11. INCOME TAXES

The Company has incurred significant operating losses since its inception and, therefore, no tax liabilities have been incurred for the periods presented. The amount of Federal and State unused tax losses available to carry forward and
apply against taxable income in future years totaled approximately $20,460,300 and $10,000,000, respectively. The loss carry forwards expire beginning in 2008. Due to the Companys continued losses, management has established a valuation
allowance equal to the amount of deferred tax asset because it is more likely than not that the Company will not realize this benefit.

Temporary
differences giving rise to the deferred tax assets at February 29, 2008, are as follows:



|                                                                                      |  |   |            |  
|------------------------------------------------------------------------------------- |  | - | ---------- | -
|Unused operating loss carry forward                                                   |  | $ | 7,318,700  |  
|Excess depreciation for tax purposes over the amount for financial reporting purposes |  |   | (1,042,500 | )
|Other                                                                                 |  |   | 17,600     |  
|                                                                                      |  |   |            |  
|                                                                                      |  |   | 6,291,600  |  
|Valuation allowance                                                                   |  |   | (6,291,600 | )
|                                                                                      |  |   |            |  
|                                                                                      |  | $ | 0          |  
|                                                                                      |  |   |            |  



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The valuation allowance increased by $98,400 during the year ended February 28, 2008. Differences between the
federal benefits computed at a statutory rate and the Companys effective tax rate and provision are as follows for the years ended February 29, 2008 and February 28, 2007:



|                                                    |  |      |          |   |      |   |          |  
|--------------------------------------------------- |  | ---- | -------- | - | ---- | - | -------- | -
|                                                    |  | 2008 |          |   | 2007 |  
|Statutory benefit                                   |  | $    | (352,300 | ) |      | $ | (493,100 | )
|State tax benefit, net of federal effect            |  |      | (37,000  | ) |      |   | (50,600  | )
|Other                                               |  |      | 4,500    |   |      |   | 17,200   |  
|Expiration of net operating loss carryforwards      |  |      | 286,400  |   |      |   | 0        |  
|Increase in deferred income tax valuation allowance |  |      | 98,400   |   |      |   | 526,500  |  
|                                                    |  |      |          |   |      |   |          |  
|                                                    |  | $    | 0        |   |      | $ | 0        |  
|                                                    |  |      |          |   |      |   |          |  

The Internal Revenue Code contains provisions that may limit the net operating loss carry forwards available for
use in any given year if significant changes in ownership interest of the Company occur.

12. RELATED PARTY TRANSACTIONS

During the years ended February 29, 2008 and February 28, 2007, two executives who are stockholders of the Company deferred approximately $232,400 and $255,900,
respectively, of compensation earned during the year. The balance due to stockholders at February 29, 2008 totaled $1,075,110. The amounts are unsecured, non-interest bearing, and have no specific repayment terms.

During the years ended February 29, 2008 and February 28, 2007, the Company issued 9,816,309 and 9,650,136 shares of common stock to a related party and
related company, respectively, valued at $112,642 and $119,758, respectively, in exchange for guarantees of a note payable. As of February 29, 2008 and February 28, 2007, all of these guarantee fees have been amortized.

The above amounts are not necessarily indicative of the amounts that would have been incurred had comparable transactions been entered into with independent parties.

13. SEGMENT INFORMATION

The Company has two
reportable segments during 2008 and 2007, manufacturing and fiberglass. Although both of these segments are in the manufacturing industry, they provide different types of products and services and each segment is subject to different marketing,
production and technology strategies. Therefore, for the years ended February 29, 2008 and February 28, 2007 the Company has included segment reporting.

For the year ended February 29, 2008, information regarding operations by segment is as follows:



|                                                        |  |               |           |            |          |   |       |          |   |       |            |  
|------------------------------------------------------- |  | ------------- | --------- | ---------- | -------- | - | ----- | -------- | - | ----- | ---------- | -
|                                                        |  | Manufacturing |           | Fiberglass |          |   | Other |          |   | Total |           
|Revenue                                                 |  | $             | 2,640,796 |            | 209,972  |   |       | 0        |   |       | 2,850,768  |  
|                                                        |  |               |           |           
|Interest expense                                        |  | $             | 138,405   |            | 25,016   |   |       | 29,771   |   |       | 193,192    |  
|                                                        |  |               |           |           
|Depreciation                                            |  | $             | 267,737   |            | 110,866  |   |       | 690      |   |       | 379,293    |  
|                                                        |  |               |           |           
|Net (loss)                                              |  | $             | 48,330    |            | (312,827 | ) |       | (771,749 | ) |       | (1,036,246 | )
|                                                        |  |               |           |           
|Property and equipment, net of accumulated depreciation |  | $             | 3,974,876 |            | 726,969  |   |       | 403      |   |       | 4,702,248  |  
|                                                        |  |               |           |           
|Segment assets                                          |  | $             | 4,293,641 |            | 787,379  |   |       | 41,193   |   |       | 5,122,213  |  

For the year ended February 28, 2007, information regarding operations by segment is as follows:



|                                                        |  |               |           |   |            |          |   |       |          |   |       |            |  
|------------------------------------------------------- |  | ------------- | --------- | - | ---------- | -------- | - | ----- | -------- | - | ----- | ---------- | -
|                                                        |  | Manufacturing |           |   | Fiberglass |          |   | Other |          |   | Total |           
|Revenue                                                 |  | $             | 2,176,391 |   |            | 174,897  |   |       | 0        |   |       | 2,351,288  |  
|                                                        |  |               |           |  
|Interest expense                                        |  | $             | 116,259   |   |            | 8,748    |   |       | 25,304   |   |       | 150,311    |  
|                                                        |  |               |           |  
|Depreciation                                            |  | $             | 285,343   |   |            | 105,696  |   |       | 690      |   |       | 391,729    |  
|                                                        |  |               |           |  
|Net (loss)                                              |  | $             | (229,291  | ) |            | (336,090 | ) |       | (885,007 | ) |       | (1,450,388 | )
|                                                        |  |               |           |  
|Property and equipment, net of accumulated depreciation |  | $             | 4,183,858 |   |            | 729,271  |   |       | 1,092    |   |       | 4,914,221  |  
|                                                        |  |               |           |  
|Segment assets                                          |  | $             | 4,467,613 |   |            | 889,983  |   |       | 75,657   |   |       | 5,433,253  |  



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Segment 1, manufacturing, consists of International Machine and Welding, Inc. and derives its revenues from machining
operations, sale of parts and service. Segment 2, fiberglass, consists of Chariot Manufacturing Company and derives its revenues from the manufacture, sale and service of fiberglass trailers.

The manufacturing segment, International Machine and Welding, Inc. has a broad and diverse base of customers. The segment does not rely on any single customer, the loss
of which would have a material adverse effect on the segment. However, this segment does generate a significant amount of revenues from sales and services provided to three different industries. For the year ended February 29, 2008, the
construction industry accounted for approximately 32% of the segments revenues, while the industrial and mining industries accounted for approximately 20% and 47%, respectively, of the segments total revenues.

Although the division does not rely on a single customer, during the year ended February 29, 2008, three of the Companys customers accounted for approximately
48% of total revenues. These customers were the Mosaic Company 36%, Bul-Head Corporation 6% and Marden Industries 6%. During the year ended February 28, 2007, three of the Companys customers accounted for approximately 32% of total
revenues. These customers were the Mosaic Company 18%, Vehicare 8% and Marden Industries 6%.



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##### Table of Contents

|ITEM 8. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|------- | ------------------------------------------------------------------------------------

NONE



|ITEM 8A. | CONTROLS AND PROCEDURES
|-------- | -----------------------

The Companys Chief Executive Officer
and Chief Financial Officer have evaluated the effectiveness of the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the fiscal period ending February 29, 2008 covered
by this Annual Report on Form 10-KSB. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Companys disclosure controls and procedures were not effective as
required under Rules 13a-15(e) and 15d-15(e) under the Exchange Act. This conclusion by the Companys Chief Executive Officer and Chief Financial Officer does not relate to reporting periods after February 29, 2008.

Managements Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) of the Company. Internal control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of
America.

The Companys internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the
Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Companys assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Management, under the supervision of the Companys Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of internal
control over financial reporting based on the framework in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the
Companys internal control over financial reporting was not effective as of February 29, 2008 under the criteria set forth in the Internal ControlIntegrated Framework.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a
material misstatement of the Companys annual or interim financial statements will not be prevented or detected on a timely basis. Management has determined that material weaknesses exist due to the lack of an independent Board member or Audit
Committee member. During the year ended February 29, 2008 the Companys independent Board member and Audit Committee member passed away. The Company is currently seeking a replacement, but has not yet identified a person to fill those
independent positions.

This annual report does not include an attestation report of the Companys registered public accounting firm regarding
internal control over financial reporting. Managements report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only managements report in this Annual
Report on Form 10-KSB.

Changes in Internal Control Over Financial Reporting

No change in the Companys internal control over financial reporting occurred during the quarter ended February 29, 2008, that materially affected, or is reasonably likely to materially affect, the
Companys internal control over financial reporting.



|ITEM 8B | OTHER INFORMATION
|------- | -----------------

None

Part III



|ITEM 9. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
|------- | --------------------------------------------------

The following
table sets forth information about each person who serves as an executive officer or director of the Company:



27



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|                   |  |     |  |                                                
|------------------ |  | --- |  | -----------------------------------------------
|Name               |  | Age |  | Positions with the Company                     
|Robert E. Maxwell  |  | 73  |  | Chairman of the Board and Director             
|                   |  |    
|Frank D. Puissegur |  | 49  |  | Chief Financial Officer and Director           
|                   |  |    
|Daniel L. Hefner   |  | 57  |  | Chief Executive Officer, President and Director

Directors of the Company hold office until the earlier of the next annual meeting of the stockholders and until
their successors have been duly elected and qualified, or their death, resignation, or removal. Two board members were elected to two-year terms at the annual stockholders meeting held January 21, 2003. Robert Maxwell and Daniel Hefner were
elected to a two-year term. Our officers are elected annually by the board of directors to hold office until the next annual meeting of our board and their successors have been duly elected and qualified. There are no family relationships between
any of our officers and directors. Set forth below is a description of the business experience during the past five years or more and biographical information for directors and executive officers identified above:

Mr. Maxwell has been a director and the Chairman of the Board of Directors of the Company since June 2000. Mr. Maxwell serves as a consultant to International
Machine and Welding, Inc., a subsidiary of the Company. He was the owner/operator of Florida Machine and Welding, Inc., located in Bartow, Florida, for 24 years until the sale of its assets in June 2000. Mr. Maxwell has served on various bank
and charitable boards of directors.

Mr. Puissegur joined the Company in June 2001 as Chief Financial Officer and Director. He became a Certified
Public Accountant with his certificate from the State of Florida and the creation of a sole practitioner office in 1982. The practice grew and has evolved into its current form as the partnership of Puissegur, Finch, & Slivinski, P.A., a
full service accounting firm. He is a member of the American and Florida Institutes of Certified Public Accountants and the National and Polk County Estate Planning Councils. The American Institute of Tax Studies has awarded Mr. Puissegur the
designation of Certified Tax Professional. He also holds the designation from the State of Florida as a Certified Family Mediator.

Mr. Hefner has been President of the Company since September 2002 and Chief Executive Officer since March 2002. He previously served as Executive Vice President from June 2000 to June 2001 and as interim President from June 2001
through February 2002. Mr. Hefner has been a director of the Company since June 2000. Mr. Hefner formerly served as President International Machine and Welding, Inc. He formerly served as President, and is now serving as Vice President of
International Commerce and Finance, Inc. an investment/consulting company for manufacturing and technology companies, and he has held this position since August 1999. Mr. Hefner has been active for the past eighteen years as an independent
consultant to individuals or business seeking to begin operations or to create turnarounds of existing business. During the same period, Mr. Hefner also operated his own independent real estate brokerage operation where he continues to serve as
President and Chief Executive Officer. From March to October 1999, Mr. Hefner was Chief Operating Officer for Chronicle Communications, Inc. (OTCBB: CRNC), a Tampa based printer.

AUDIT COMMITTEE

The Audit Committee consists of Frank Puissegur and Robert Maxwell. The Audit Committee selects the
independent auditors; reviews the results and scope of the audit and other services provided by the Companys independent auditors, and reviews and evaluates the Companys internal control functions. The board of directors has determined
that due to the death of Mr. Andrew Mueller (previous member) during the year, the audit committee does not have an independant financial expert; as such term is defined under federal securities law.



|ITEM 10. | EXECUTIVE COMPENSATION
|-------- | ----------------------

The following summary compensation table sets
forth cash and non-cash compensation awarded, paid or accrued, for the past three fiscal years of the Companys Chief Executive Officers, and all other, if any, whose total annual compensation exceeded $100,000 for the past three fiscal years
(collectively, the  Named Executive Officers).



28



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##### Table of Contents

SUMMARY COMPENSATION TABLE



|                                                    |      |                            |         |                     |        |          |                          |                |           |     |     |        |   |         | 
|--------------------------------------------------- | ---- | -------------------------- | ------- | ------------------- | ------ | -------- | ------------------------ | -------------- | --------- | --- | --- | ------ | - | ------- | 
|                                                    |      | Summary Compensation Table |         | OptionAwards($) (A) |        |          | All OtherCompensation($) |                | Total ($)
|Name Principal Positions                            |      | YearEnded                  |         | Salary($)           |        | Bonus($) |                          | StockAwards($) |           |     |    
|Daniel Hefner,President and Chief Executive Officer |      | 2008                       |         | 150,000             |        |         |                          |               |           |    | (3) |        |   |         | 
|                                                    | 2007 |                            | 150,000 |                     |       |          |                         |                |          | (1) |     | 10,465 |   | 160,465
|                                                    | 2006 |                            | 215,700 |                     |       |          |                         |                | 100,000   |     |     | 10,950 |   | 226,650
|                                                    |      |                            |         |                     |        |          |                         
|Robert Maxwell,Chairman of the Board                |      | 2008                       |         | 150,000             |        |          |                          |               |           |    |     |        |  |         | 
|                                                    | 2007 |                            | 65,900  |                     | 40,000 |          |                         |                |          |     |     |       |   | 105,900

Both Hefner and Maxwell were compensated over $100,000 for fiscal years 2008 and 2007.

The Company does not have any annuity, retirement, pension, deferred or incentive compensation plan or arrangement under which any executive officers are entitled to
benefits, nor does the Company have any long-term incentive plan pursuant to which performance units or other forms of compensation are paid. Executive officers may participate in group life, health and hospitalization plans if and when such plans
are available generally to all employees. All other compensation consisted solely of health care premiums.

EMPLOYMENT AGREEMENTS

The Company signed an employment agreement with Daniel L. Hefner on June 1, 2000 containing a base salary of $60,000; a minimum cash bonus of $15,000 per year and a
4% annual increase of the base pay. Stock options are granted on the signing and June 1 of each contract year at the rate of 100,000 common share equivalents. The contract also provides for a $750 per month car allowance and the payment of all
insurance, fuel and maintenance costs and all perquisites related to health, dental, life or disability as may be offered to the executive management staff. All other provisions of the previous contract related to capital raises or warrant or
exercise revenue were omitted except for the termination provisions stated above. This agreement expired in 2004 and Mr. Hefner has served without agreement since that time. In 2006, the Compensation Committee recommended, and the Board of
Directors approved, an increase in base salary to $150,000 annually, retroactive to June 2004.

Based upon the recommendation of the Compensation Committee
and approval by the Board of Directors, the Company signed an employment agreement with Robert E. Maxwell, Chairman of the Board to mirror that received by Mr. Hefner.

DIRECTOR COMPENSATION

Directors of the Company who are not employees or consultants do not receive any compensation for
their services as members of the Board of Directors, but are reimbursed for expenses incurred in connection with their attendance at meetings of the Board of Directors.

COMPENSATION COMMITTEE

Robert E. Maxwell, Daniel L. Hefner and Frank Puissegur are members of the Compensation Committee,
which reviews and makes recommendations with respect to compensation of officers, employees and consultants, including the granting of options under the Companys NonQualifying Stock Option Plan approved effective July 10, 2002 and the
Employee Stock Incentive Plan approved effective May 27, 2003. Additionally, the committee reviews executive compensation and makes recommendations to the Board of Directors.

NONQUALIFYING STOCK OPTION PLAN

On July 10, 2002 the Company adopted a Non-qualifying Stock Option/Stock Appreciation
Rights Plan and reserved 7,000,000 common shares of stock for employees, officers and consultants. These options are granted by the Board at their discretion. As of February 29, 2008, the Company has 57,400 options available for future issuance
under this plan.

EMPLOYEE STOCK INCENTIVE PLAN

Effective
May 27, 2003, the Company adopted an employee stock incentive plan (the Plan) for the year 2003 that authorizes up to 20,000,000 shares of common stock for grants of both incentive stock options and non-qualified stock options to
designated



29



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##### Table of Contents

officers, employees, and certain non-employees. Effective July 2003, October 2003 and August 2004, the Company amended this plan to include an
additional 20,000,000, 25,000,000 and 20,000,000 shares of common stock, respectively. Effective December 2004, the Company amended the plan to reduce the number of shares of common stock by 7,000,000 shares. Options granted under the Plan must be
exercised within 10 years of the date of grant. The exercise price of options granted may not be less than 85 percent of the fair market value of the stock. As of February 29, 2008, the Company has no options available for future issuance under
this plan.

Effective May 27, 2003, the Company also adopted a non-employee directors and consultants retainer stock plan for the year 2003. This plan
authorizes up to 5,000,000 shares of common stock to be issued in the amount of compensation for services to directors and consultants at the deemed issuance price of not less than 85% of the fair market value of the stock. Effective July
2003, October 2003 and December 2004, the Company amended this plan to include an additional 1,000,000, 15,000,000 and 7,000,000 shares of common stock, respectively. As of February 29, 2008, the Company has no options available for future
issuance under this plan.

At February 29, 2008, the Company did not have any long-term incentive plans nor had it awarded any restricted shares to
any Named Executive Officer. The table set forth below contains information with respect to the award of stock options during the fiscal year ended February 29, 2004 and February 28, 2003 (as there were no awards of stock options during
the fiscal year ended February 28, 2005) to the Named Executive Officers covered by the Salary Compensation Table.

OPTION GRANTS TO NAMED EXECUTIVES
IN LAST FISCAL YEAR

During 2008, the Company did not grant any option awards to our executive officers.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR

AND FISCAL YEAR-END OPTION/SAR VALUES

The following table sets forth, for each Named Executive Officer in the Summary Compensation Table who
holds stock options during fiscal 2008, the number of stock options held on February 29, 2008 and the realizable gain of stock options that are in-the-money.



|                 |  |                                |                |               |                  |                                                                     |              |                                                            |  |                |     |  |  
|---------------- |  | ------------------------------ | -------------- | ------------- | ---------------- | ------------------------------------------------------------------- | ------------ | ---------------------------------------------------------- |  | -------------- | --- |  | -
|Name             |  | SharesAcquired orExercised (#) |                | ValueRealized |                  | Number ofSecurities UnderlyingUnexercised
Optionsat Fiscal Year End |              | Value of UnexercisedIn-the-Money Options AtFiscal Year End
|                 |  |                                | Exercisable(#) |               | Unexercisable(#) |                                                                     | Exercisable$ |                                                            |  | Unexercisable$
|Daniel L. Hefner |  | 100,000                        |                | 0             |                  | 100,000                                                             |              | 0                                                          |  | 2,000          | (1) |  | 0
|Daniel L. Hefner |  | 100,000                        |                | 0             |                  | 100,000                                                             |              | 0                                                          |  | 2,000          | (1) |  | 0



|(1) | Based upon the closing price of the Common Stock as quoted on the Over The Counter Bulletin Board on February 28, 2008 of $0.02 per share.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------



|ITEM 11. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|-------- | --------------------------------------------------------------

The following table sets forth certain information regarding the beneficial ownership of the Companys outstanding Common Stock as of February 29, 2008, by: (i) each director and nominee for director of the Company,
(ii) each Named Executive Officer, (iii) all directors and executive officers of the Company as a group, and (iv) each person known to the Company beneficially owning more than 5% of the outstanding Common Stock. Except as otherwise
indicated, the persons named in the table have sole voting and investment power with respect to all of the Common Stock owned by them.



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|                                                               |  |                                              |  |                        |    
|-------------------------------------------------------------- |  | -------------------------------------------- |  | ---------------------- | ---
|Name and Address or Number in Group                            |  | Amount and Nature ofBeneficial Ownership (1) |  | Percentageof Class (2) |    
|Directors and Executive Officers                               |  |                                              |  |                        |    
|                                                               |  |                                             
|Robert E. Maxwell (3) 1400 Chamber Drive Bartow, FL            |  | 84,247,519                                   |  | 33.598                 | %  
|                                                               |  |                                             
|Frank D. Puissegur 1400 Chamber Drive Bartow, FL               |  | 1,000,000                                    |  | .3988                  | %**
|                                                               |  |                                             
|Daniel L. Hefner (4) 1400 Chamber Dr. Bartow, FL               |  | 12,613,609                                   |  | 5.030                  | %  
|                                                               |  |                                             
|All Directors and Executive Officers as a Group (3 persons)(5) |  |                                              |  | 39.0268                | %  



(**) Less than 1%

|(1) | In accordance with Rule 13d-3 promulgated pursuant to the Securities Exchange Act of 1934, a person is deemed to be the beneficial owner of a security for purposes of the rule if he
or she has or shares voting power or dispositive power with respect to such security or has the right to acquire such ownership within sixty days. As used herein, voting power is the power to vote or to direct the voting of shares, and
dispositive power is the power to dispose or direct the disposition of shares, irrespective of any economic interest therein.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | In calculating the percentage ownership for a given individual or group, the number of shares of Common Stock outstanding includes unissued shares subject to options, warrants,
rights or conversion privileges exercisable within sixty days held by such individual or group, but are not deemed outstanding by any other person or group.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Includes (a) 348,360 shares of Common Stock held by his spouse Barbara Maxwell, (b) 83,899,159 shares of Common Stock beneficially owned as the President of International
Commerce and Finance, Inc.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Includes (a) 200,000 shares of Common Stock, which may be acquired pursuant to currently exercisable options (b) 12,413,609 shares of Common Stock held personally
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Total shares controlled by all directors and executive officers as a group.
|--- | ---------------------------------------------------------------------------

The Company has two classes of preferred stock outstanding comprised of 102 shares of Series A Preferred Stock and 3,944 shares of Series B Preferred Stock. Each outstanding class of preferred stock has voting rights and is convertible into
Common Stock. Each share of Series A Preferred Stock converts to 1,289 shares of Common Stock and votes on an as converted basis. 3,207 shares of Series B Preferred Stock is convertible into 641,400 shares of Common Stock and 737 Series B Preferred
Shares convert into 737,000 shares of Common Stock and votes on an as converted basis.

Gerald Hoak, of 235 Deerfield Drive, Pottsville, PA 17901, owner of
20 shares or 19.61% of Series A Preferred Stock, and Merit Capital Associates, (substantially owned by Russ and Sylvia Newton) of 1221 Post Road East, Westport, CT 06880 owner of 40 shares or 39.22% of Series A Preferred Stock are the only owners of
more than 5% of the class. No director or officer is the beneficial owner of any of the Series A or Series B Preferred Stock.

Beneficial Voting Power Held

The following table sets forth the voting power in the Companys equity securities, as of February 28, 2007 held by: (i) each director of
the Company, (ii) each Named Executive Officer, (iii) all directors and executive officers as a group, and (iv) each person known by the Company to own more than 5% of any class of outstanding equity security of the Company. The
voting power set forth in this table is the beneficial voting power held, directly and indirectly, by such person as of the date indicated assuming no conversion of the preferred stock (i.e., includes shares that may be acquired within 60 days by
reason of option or warrant exercise but not those that could be obtained upon conversion of preferred stock).



|                                                            |  |                                             |  
|----------------------------------------------------------- |  | ------------------------------------------- | -
|Name                                                        |  | Percent of OutstandingVoting Power Held (1) |  
|Directors and Executive OfficersRobert E. Maxwell (3)       |  | 29.58                                       | %
|Frank Puissegur                                             |  | *                                           |  
|Daniel L. Hefner (2)                                        |  | 3.89                                        | %
|All directors and executive officers as a group (3 persons) |  | 34.31                                       | %
|International Commerce and Finance (4)                      |  | 29.27                                       | %



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|* | Less than 1%
|- | ------------

|(1) | Based upon 226,400,415 outstanding shares of common stock, 102 outstanding shares of Series A Preferred Stock and 3944 outstanding shares of Series B Preferred Stock. Each share of
Common Stock is entitled to one vote per share. Each outstanding share of Series A Preferred Stock is entitled to 1,289 votes. 3,207 shares of Series B Preferred Stock are entitled to 200 votes per share and 737 shares of Series B Preferred are
entitled 1,000 votes each. Accordingly, as of Feb 28, 2004, the Series A Preferred Stock and Series B Preferred Stock are entitled to an aggregate of 131,478 votes and 1,378,400 votes, respectively. Voting rights are calculated in the same manner
described in footnote 2 to table above disclosing the Security Ownership of Management and Certain Beneficial Owners (Beneficial Ownership Table). Totals could exceed 100% due to such calculations and overlapping beneficial voting rights
held between holders as set forth herein.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Consisting of 200,000 votes upon exercise of currently exercisable options to purchase Common Stock and 12,413,609 shares of Common Stock.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Includes 348,360 shares of Common Stock held by his spouse Barbara Maxwell, 83,899,159 shares of Common Stock beneficially owned as the President of International Commerce and
Finance, Inc.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Consisting of 69,970,153 shares of Common Stock.
|--- | ------------------------------------------------



|ITEM 12. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
|-------- | ----------------------------------------------

STOCKHOLDERS AGREEMENT

A Stockholders Agreement dated April 9, 1998 was entered into among ULLICO, the Company, David N. DeBaene, Annette DeBaene, Norman DeBaene, Thomas
Lisi, and Steve Panneton (each, a Holder). The Stockholders Agreement provides that the Company shall have a right of first refusal before any Holder may transfer any shares of Common Stock. ULLICO has a right of second refusal and
co-sale rights; if the Company does not elect to buy all of the securities it is offered. If ULLICO enters into an agreement to transfer, sell or otherwise dispose of all of its Preferred Stock, Warrants and any Common Stock issued upon conversion
or exercise of the former (such agreement referred to as a Tag-Along Sale), each Holder has the right to participate in the Tag-Along Sale. If ULLICO, alone or with another person, accepts an offer from any party who is unaffiliated with
it to purchase any of ULLICOs shares which results in such party having the ability to elect a majority of the Companys Board of Directors, then, at the request of ULLICO, each Holder shall sell all shares of Common Stock held by such
Holder (referred to as a Drag-Along Sale).

During the years ended February 29, 2008 and February 28, 2007, two executives who are
stockholders of the Company deferred approximately $232,400 and $255,900, respectively, of compensation earned during the year. The balance due to stockholders at February 29, 2008 totaled $1,075,110. The amounts are unsecured, non-interest
bearing, and have no specific repayment terms.

During the years ended February 29, 2008 and February 28, 2007, the Company issued 9,816,309 and
9,650,136 shares of common stock to a related party and related company, respectively, valued at $112,642 and $119,758, respectively, in exchange for guarantees of a note payable. As of February 29, 2008 and February 28, 2007, all of these
guarantee fees have been amortized.

The above amounts are not necessarily indicative of the amounts that would have been incurred had comparable
transactions been entered into with independent parties.



|ITEM 13. | EXHIBITS AND REPORTS ON FORM 8-K
|-------- | --------------------------------

List of Exhibits

(a) The exhibits that are filed with this report or that are incorporated herein by reference are set forth in the Exhibit Index below:

EXHIBIT INDEX



|                       |  |                                                                                                                                             |  |                      
|---------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------
|Incorporated Documents |  | SEC Exhibit Reference                                                                                                                       |  | Sequentially Numbered
|3.1                    |  | Certificate of Incorporation of the Registrant, As amended as filed with the Registrants Form SB-2, on October 27, 1995, File No. 33-98486 |  | N/A                  



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|     |  |                                                                                                                                                                                                                 |  |    
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---
|3.2  |  | By-Laws of the Registrant, as amended As filed with the Registrants Form SB-2 on October 27, 1995, File No. 33-98486                                                                                           |  | N/A
|     |  |                                                                                                                                                                                                                
|4.1  |  | Form of Warrant Agreement As filed with the Registrants Form SB-2, on October 27, 1995, File No. 33-98486                                                                                                      |  | N/A
|     |  |                                                                                                                                                                                                                
|4.2  |  | Form of Warrant of the Registrant issued in the Registrants January 1995 Private Placement, as filed with the Registrants Form SB-2 on October 27, 1995, File No. 33-98486                                    |  | N/A
|     |  |                                                                                                                                                                                                                
|4.3  |  | Form of Unit Purchase Option issued to Merit Capital Associates, Inc., as filed with the Registrants Form SB-2 on October 27, 1995, File No. 33-98486                                                          |  | N/A
|     |  |                                                                                                                                                                                                                
|4.4  |  | Form of 11% Convertible Subordinated Note of the Registrant issued in the Registrants August 1995 Private Placement, as filed with the Registrants Form SB-2 on October 27, 1995, File
No. 33-98486 Placement |  | N/A
|     |  |                                                                                                                                                                                                                
|4.5  |  | Form of Warrant of the Registrant issued in the Registrants August 1995 Private Placement, as filed with the Registrants Form SB-2 on October 27, 1995, File No. 33-98486                                     |  | N/A
|     |  |                                                                                                                                                                                                                
|4.6  |  | Securities Purchase Agreement dated April 9, 1998, as filed with the Registrants Form 10KSB on June 13, 1999                                                                                                   |  | N/A
|     |  |                                                                                                                                                                                                                
|4.7  |  | Certificate of Designation of Series B Preferred Stock, as filed with the Registrants Form 10 KSB on June 13, 1999                                                                                             |  | N/A
|     |  |                                                                                                                                                                                                                
|4.8  |  | Stockholders Agreement dated April 9, 1998, As filed with the Registrants Form 10 KSB on June 13, 1999                                                                                                        |  | N/A
|     |  |                                                                                                                                                                                                                
|4.9  |  | Registration Rights Agreement dated April 9, 1998, As filed with the Registrants Form 10 KSB on June 13, 1999                                                                                                  |  | N/A
|     |  |                                                                                                                                                                                                                
|4.10 |  | Warrant Certificate issued to ULLICO, as filed with the Registrants Form 10 KSB on June 13, 1999                                                                                                               |  | N/A
|     |  |                                                                                                                                                                                                                
|4.11 |  | Escrow Agreement as filed with the Registrants Form 10 KSB on June 13, 1999                                                                                                                                    |  | N/A
|     |  |                                                                                                                                                                                                                
|4.12 |  | Certificate of Designations of Series A Preferred Stock, as filed with the Registrants Form 10-KSB on June 11, 1998                                                                                            |  | N/A
|     |  |                                                                                                                                                                                                                
|4.13 |  | Certificate of Designation of Series C Preferred Stock, As filed with the Registrants Form 10-KSB on June 12, 2000                                                                                             |  | N/A



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|      |  |                                                                                                                                                                                                                                 |  |    
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---
|4.14  |  | Amendment to the Articles of Incorporation of JD American Workwear, Inc. for name change to American Commerce Solutions, Inc. and the increase in authorized shares, as filed with the
Registrants Form10-KSB on June 14, 2001 |  | N/A
|      |  |                                                                                                                                                                                                                                
|10.2  |  | Employment Agreement with Steven D. Smith, As filed with Registrants Form 10-KSB on July 19, 2001                                                                                                                              |  | N/A
|      |  |                                                                                                                                                                                                                                
|10.3  |  | Registrants 1995 Stock Option Plan, as filed with the Registrants Form SB-2 on October 27, 1995, File No. 33-98486                                                                                                            |  | N/A
|      |  |                                                                                                                                                                                                                                
|10.4  |  | Form of Option Agreement under the Registrants 1995 Stock Option Plan, as filed with the Registrants Form SB-2 on October 27, 1995, File No. 33-98486                                                                         |  | N/A
|      |  |                                                                                                                                                                                                                                
|10.5  |  | Employment Agreement with Norman Birmingham, As filed with Registrants Form 10-KSB on June 12, 2000                                                                                                                            |  | N/A
|      |  |                                                                                                                                                                                                                                
|10.6  |  | Consulting Agreement with Richard Sullivan, As filed with Registrants Form 10-KSB on June 12, 2000                                                                                                                             |  | N/A
|      |  |                                                                                                                                                                                                                                
|10.7  |  | Option to Purchase Businesses between Registrant and International Commerce and Finance, Inc., As filed with Form 10-KSB on June 12, 2000                                                                                       |  | N/A
|      |  |                                                                                                                                                                                                                                
|10.8  |  | Stock Purchase Agreement between Registrant and Patina Corporation, as filed with Registrants Form 10-KSB on June 12, 2000                                                                                                     |  | N/A
|      |  |                                                                                                                                                                                                                                
|10.9  |  | Employment Agreement with David DeBaene January 1, 2001, as filed with Registrants Form 10-KSB on June 12, 2000                                                                                                                |  | N/A
|      |  |                                                                                                                                                                                                                                
|10.10 |  | Asset Sale Agreement between Registrant and David N. Debaene June 1, 2001, as filed with Registrants Form 10-QSB on July 26, 2001                                                                                              |  | N/A
|      |  |                                                                                                                                                                                                                                
|10.11 |  | Stock Purchase Agreement between Registrant and Rhode Island truck and Equipment, Corp. October 31, 2001, as filed with Registrants Form 10-QSB on December 14, 2001                                                           |  | N/A
|      |  |                                                                                                                                                                                                                                
|10.12 |  | Employment Agreement with Daniel L. Hefner dated June 1, 2000, as filed with the Registrants Form 10-KSB on May 27, 2004                                                                                                       |  | N/A
|      |  |                                                                                                                                                                                                                                
|14    |  | Code of Ethics, As filed with the Registrants Form 10-QSB on May 27, 2004                                                                                                                                                      |  | N/A
|      |  |                                                                                                                                                                                                                                
|31.1  |  | Certification of the Chief Financial Officer                                                                                                                                                                                    |  |    
|      |  |                                                                                                                                                                                                                                
|31.2  |  | Certification of the Chief Executive Officer                                                                                                                                                                                    |  |    
|      |  |                                                                                                                                                                                                                                
|32    |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbaenes-Oxley Act of 2002                                                                                                         |  |    

(b) Reports on Form 8-K

None



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##### Table of Contents

|ITEM 14. | PRINCIPAL ACCOUNTANTS FEES AND SERVICES
|-------- | ---------------------------------------

Audit Fees

During 2008 and 2007, we were billed by our accountants, Pender Newkirk & Company, approximately $52,500 and $63,316 for audit and review fees associated with
our 10-KSB and 10-QSB filings.

Non-Audit related fees

None

Tax Fees

During 2008 and 2007 we were
billed by our accountants, Bella, Hermida, Gillman, Hancock, & Mueller Certified Public Accountants approximately $4,500 and $3,000 to prepare our federal and state tax returns.

All Other Fees

None

Audit Committee Pre-Approval Process, Policies and Procedures

Our principal auditors have performed their audit procedures in accordance
with pre-approved policies and procedures established by our Audit Committee. Our principal auditors have informed our Audit Committee of the scope and nature of each service provided. With respect to the provisions of services other than audit,
review, or attest services, our principal accountants brought such services to the attention of our Audit Committee, or one or more members of our Audit Committee for the members of our Board of Directors to whom authority to grant such approval had
been delegated by the Audit Committee, prior to commencing such services.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

AMERICAN COMMERCE SOLUTIONS, INC.



|                    |  |     |  |                                                     
|------------------- |  | --- |  | ----------------------------------------------------
|Date: June 13, 2008 |  | By: |  | /s/ Daniel L. Hefner                                
|                    |  |     |  | Daniel L. Hefner, President                         
|                    |  |    
|Date: June 13, 2008 |  | By: |  | /s/ Frank D. Puissegur                              
|                    |  |     |  | Frank D. Puissegur, CFO and Chief Accounting Officer



35